Credit Suisse “seriously breached its supervisory obligations” in its relationship with the disgraced financier Lex Greensill and his companies, the Swiss financial watchdog has ruled.
The Swiss Financial Market Supervisory Authority (Finma) said it had concluded its enforcement proceedings against the bank, Switzerland’s second largest, after the collapse of Greensill Capital in March 2021.
Greensill, which lent money to companies by buying their invoices upfront, collapsed after credit insurers withdrew cover, amid concern over its huge exposure to the steel and commodities tycoon Sanjeev Gupta’s GFG Alliance. Credit Suisse has been trying to recover $10bn (£8.2bn) of funds trapped in Greensill, as well as overhauling its risk management and compliance.
The bank said it had recovered $7.4bn so far, including cash already distributed to investors and cash remaining in the funds. It added that it had a “clear strategic plan in place” that was being implemented by a new leadership team.
The Swiss regulator said: “Finma finds that Credit Suisse seriously breached its supervisory obligations … with regard to risk management and appropriate organisational structures.”
It noted that Credit Suisse had revised governance structures and strengthened control processes in the approval and monitoring of fund products. The regulator supports this, but ordered further measures.
In future, the bank will have to periodically review at executive board level the most important business relationships – about 500 – in particular for counterparty risks. In addition, the bank is required to record the responsibilities of its approximately 600 highest-ranking employees in a responsibility document. They must be sanctioned by the bank “if they do
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