The Swiss financial regulator Wednesday defended the rescue of Credit Suisse through a controversial takeover by rival bank UBS as the best solution with the least risk of spreading a broader crisis and severely damaging Switzerland's standing as a financial center.

Officials deflected blame for the collapse of the country's second-biggest bank, saying the Swiss Financial Market Supervisory Authority, or FINMA, had been quick to respond, calling instead for more powers to take lenders to the task.

"We reacted very fast," said President of FINMA Marlene Amstad, adding that it was the responsibility of management to avoid such a situation and that regulations alone could not solve a crisis of confidence such as the one that toppled the bank.

The merger was "the best option" and one that "minimized risk of contagion and maximized trust," Urban Angehrn, CEO of FINMA, told reporters in the Swiss capital of Bern.

The remarks of the regulator, which has primary responsibility for oversight of one of the world's biggest financial centers, were in stark contrast with the humbling apology issued by Credit Suisse's chairperson a day earlier.

Axel Lehman had told shareholders he was "truly sorry" for taking the Swiss bank to the brink of bankruptcy.

Angern said two other options – a takeover by the Swiss government or putting Credit Suisse into insolvency proceedings – had serious drawbacks.

Insolvency would have left the functional parts of Credit Suisse in operation as a Swiss-only bank, but one with a "damaged reputation" through bankruptcy, he added. A temporary takeover by the Swiss government would have exposed taxpayers to the risk of losses.

"One can well imagine, what devastating effect the insolvency of a big wealth management bank of Credit Suisse AG would have had on Swiss private banking," Angern said. "Many other Swiss banks could have faced a bank run, just as Credit Suisse did itself in the fourth quarter."

The globe's biggest banks, including Credit Suisse, are required to submit emergency plans for winding them up if they fail, a measure arrived at through international negotiations aimed at preventing a repeat of the 2008 global financial crisis triggered by the failure of globally connected U.S. investment bank Lehman Brothers.

Triggering such an emergency plan "would have achieved its immediate aim" of preserving payments and supporting the economy in Switzerland, Angehrn said.

"But the damage to Switzerland as a place to do business, to the reputation of Switzerland, to tax revenue and jobs, would have been enormous," he added.

Swiss government officials, including the financial regulator, hastily orchestrated a $3.25 billion takeover of Credit Suisse by UBS on March 19 after Credit Suisse's stock plunged and jittery depositors quickly pulled out their money.

Authorities feared that a teetering Credit Suisse could further roil global financial markets following the collapse of two U.S. banks.

More power sought after debacle

Credit Suisse shareholders did not get to vote on the deal after the government passed an emergency ordinance to bypass that step. Shareholders aired criticisms of Credit Suisse's struggles at what may have been the bank's last annual general meeting Tuesday.

It marked an ignominious end to the 167-year-old bank founded by Alfred Escher, a Swiss magnate affectionately dubbed King Alfred I, who helped to build the country's railways and then the bank.

UBS faces shareholders at its annual meeting Wednesday.

FINMA's Amstad called for more power to penalize and name and shame banks that break the rules. Her agency is powerless to call banks to account, as Switzerland pursues a hands-off approach to the industry, giving it free rein.

"Our instruments hit their limits... as seen with Credit Suisse," said Amstad, making a rare public appeal for more power.

"FINMA has no power to fine," she said, adding that she would welcome such clout. "It's an exception when compared with other regulators."

She also said that most of the regulator's probes into banks had to remain secret, adding that this should change. Switzerland built its financial industry on secrecy and this discretion is deeply ingrained in the country.

"FINMA is keen to ensure that we can make our work more visible to the public in the future – as our supervisory colleagues in other countries are often allowed to do," she said.

The agency also wants bankers to be held to account in a special regime that singles them out as responsible.

"Imposing fines would be a step forward. But, as we have seen, Credit Suisse paid billions in fines and that didn't change its catastrophic business strategy," said Dominik Gross of the Swiss Alliance of Development Organisations.

"There must be the power to pursue top managers of banks for criminal negligence."

While the takeover of Credit Suisse has been agreed upon, many hurdles, such as winning regulatory approval from countries around the world, lie ahead.