Two figures help understand the downfall of Credit Suisse: In 2007, the Swiss bank was the eighth largest listed institution in the world by market capitalization. But when its shares lost 31% yesterday morning, before recovering partially in the afternoon (-24.24% at the close), The bank fell to 155th place, with a market capitalization of about CHF 7 billion, About 7.15 billion euros. This means that Credit Suisse has wiped out nearly 100 billion francs of capitalization in the past 15 years. At current valuations, it looks like Goldman Sachs has lost its entirety, figure out financial times.
To stop the collapse and the risk of bankruptcy, which is indicated by the sudden rise in derivatives (default swaps) to secure the riskiest investments, which rose to a record thousand points (18 times the one-year credit swaps of UBS), Credit Suisse appealed to the Swiss Central Bank. In the evening, the SNB and regulator FINMA said that Credit Suisse meets the capital and liquidity requirements imposed on systemically important banks and that the SNB will provide the bank with liquidity if needed. But someone is already supposing a soup, with a separate sale of healthy assets: the Swiss bank, its wealth management division and part of its investment banking division, which can be listed individually on the exchange.
167 years of history
It will be the end of the institute founded by Alfred Escher in Zurich in 1856. But in its 167-year history, Credit Suisse has often been at the center of scandals and crises: DTo trade gold with Nazi Germany and trade relations with the Reich To dangerous relationships with Greensill and Archegos Capital, which failed in 2021until he was accused of money laundering, with the disclosure of 18,000 secret accounts, including accounts in the name of criminals, wanted for torture and tax evaders, which he revealedInternational journalistic investigation «Secrets of SwitzerlandIn February 2022.
Let’s focus on the last two years. After the Suisse Secrets media scandal, Credit Suisse was in June Convicted of failing to prevent money laundering by a Bulgarian gang of cocaine smugglers.
In March 2022, a court in Bermuda ruled so Former Georgian Prime Minister Bidzina Ivanishvili and her family are entitled to more than half a billion dollars in compensation By the local life insurance arm of Credit Suisse, after a Swiss court sentenced a former adviser to the bank (Pascal Lescaudron) in 2018 for forging the signatures of former clients, including Ivanishvili, to 8 years.
Last October the bank agreed to paid $475 million to the US and UK regulators, After pleading guilty to defrauding investors To obtain an $850 million loan for Mozambique to finance a fleet of tuna fishing vessels. But about 200 million went in bribes to CS bankers and Mozambican government officials. In Mozambique, Credit Suisse also arranged a secret loan to the International Monetary Fund which withdrew its support for the country, when it admitted receiving an undisclosed 1.4 billion.
American Family Bureau
But the big problem happened a year ago. In March 2021, Credit Suisse loses $5.5 billion as US family office Archegos Capital Management defaults. Also in March 2021, In the aftermath of the collapse of Greensill Capital, Credit Suisse was forced to freeze $10 billion in funds. The Swiss bank had sold billions of Grensel’s debt to investors, assuring the high-yield securities were low-risk because the underlying credit exposure was fully insured. After the lawsuits, Credit Suisse has returned about $6.8 billion to investors so far.
Grinsel and Archegos resulted in a loss of 5.9 billion francs in the 2022 budget. Credit Suisse was forced to launch a strict reorganization plan and increase the capital by 4 billion francs, which changed the shareholding structure, making the Arabs the first shareholders. According to the bank’s website, Now the National Bank of Saudi Arabia has 9.88%; Qatar Holding 5.03%; Asset manager Olayan Group 4.93% and BlackRock 4.07%. He was the first Saudi shareholder in the new capital increase that sank Credit Suisse’s stake, which in the past six months has lost nearly 65% on the Zurich Stock Exchange (more than 35% in the last 5 days after the collapse of the Silicon Valley bank).
Not just financing
However, Credit Suisse has not only been involved in financial scandals. former CEO, Tejan Thiam, forced to leave office in March 2020: detect realization The bank hired private investigators to spy on former head of wealth management Iqbal Kanafter moving to competitor UBS. On the other hand, Antonio Horta Osorio resigned from his position as the Chairman of Credit Suisse in January 2022.after less than a year at the top of the institute: he broke anti-Covid quarantine rules to attend the European Football Championship final at Wimbledon (won by Italy).
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