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Bloomberg: Credit Suisse’s Crisis


How a run of bad news took a 167-year-old institution known for Swiss stability to the brink. Here’s a look at a history of crises at Credit Suisse.

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Transcript

From Credit Suisse to crisis. They say all press is positive, but Credit Suisse has had more than its share of bad headlines. Founded in 1856 by industrialist Alfred Escher, the Swiss bank grew to become one of the biggest financial services companies operating in around 50 countries across the world.

It came out of the 2008 financial crisis in a relatively strong position and did not take any government bailouts. In the aftermath the bank cut jobs as it pivoted away from risky investment banking to focus on wealth management. That brought problems and was soon pulled into a number of cases

For assisting tax evasion. We should have caught it. We should have had managers, we should have had control people who caught the fact that this was happening. But absolutely they were they were wantonly violating our policies. Its global presence brought risks, raising $2 billion of funding for Mozambique’s fishing industry

Saw Credit Suisse drawn into a wire fraud criminal probe. In March 2019 it emerged that Credit Suisse had hired private investigators to spy on a former employee it suspected of taking its clients. Our shareholders have been extremely robust. If you look at the share price

Its not the share price of a company in crisis. Two years later came more problems. The collapse of supply chain financing company Greensill Capital embroiled the bank. Swiss regulator FINMA said it made partly false and overly positive statements when it marketed $10 billion of funds to clients as a safe investment.

But soon after came Archegos Capital Management. The collapse of Archegos brought Credit Suisse $5 billion of losses and saw executives fined. It’s also found itself the first Swiss bank to receive a criminal conviction tied to a cocaine smuggler. Efforts to reassure investors ran into problems The outflows basically have stopped.

What we saw is two, three weeks in October…vwooom… and sustained flattening out, They have stopped. This gradually coming back, in particular in Switzerland. That saw FINMA open another investigation when the bank reported those outflows had continued. As the bad news came in, losses mounted and investors became even more wary

Including its biggest, the Saudi National Bank. I’m wondering whether you would be open to assisting further if there was another call for additional liquidity from Credit Suisse? The answer is absolutely not. For many reasons outside the simplest reason, which is regulatory, is statutory. And those few words were enough

To send Credit Suisse shares diving to an all time low. Even a $54 billion lifeline from the Swiss National Bank could not erase all the losses. It may have lasted 167 years, but Credit Suisse will be remembered for this one.

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42 COMMENTS

  1. The main problem with credit suisse and many EU Banks was that they trusted the US sovereign debts and bonds too much. Never in their dreams they expect these bonds they hold will drop so much in prices. Very poor risk and investment management. No more credibility for swiss and american banks and central banks anymore😬👎

  2. Ok so the Swiss want to keep their banks to themselves. In the new markets, they might not sell to the American investor but cultural close would be France or Germany to buy it out. Regional but multilateral. Look at all the Japanese giants and how much they worked with S Korea and China since the late 1980s.

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