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Credit Suisse on FCA naughty step and in for stricter supervision

13/06/2022

The U.K.'s financial regulator put Credit Suisse on its watch list for stricter supervision.

  1. According to the FT newspaper, citing a letter sent in May, The Financial Conduct Authority moved last month to put the troubled Swiss bank on its watch list over concerns Credit Suisse hadn't moved the needle far enough on improving its culture, governance and risk measures,
  1. The FT report said.
  • The letter sought evidence of new moves to prevent misconduct, including dealing with «persistent» cultural issues,

«Well-Advanced» Efforts

  1. Being added to the watch list signals serious concerns as only around 20 institutions are usually on the list, out of around 60,000 under regulation, the report said, citing a person familiar with how the list operates.
  2. Credit Suisse told the «Financial Times» in a statement that it doesn't comment on its talks with regulators but was «well advanced» on its plan to strengthen its risk culture.

Archegos-Greensill

  1. The twin debacles surrounding the bankruptcy of Archegos and the closure of Credit Suisse's Greensill funds continue to haunt the bank.
  2. Archegos Capital Management was a family office managing Bill Hwang's personal assets; the private investment firm collapsed amid fraud and market manipulation allegations. Credit Suisse lost around $5 billion in its dealings with Archegos.
  3. https://www.justice.gov/opa/pr/four-charged-connection-multibillion-dollar-collapse-archegos-capital-management

Market Disruptions

  1. Greensill Capital and Credit Suisse ran $10 billion in supply chain finance funds together – Greensill would make supply-chain loans to companies and then create notes based on the loans; the notes were marketed as safe, insured investments.
  2. But after the collapse of Greensill amid Covid-related market disruptions, allegations emerged of fraudulent dealings; Credit Suisse also faced allegations of conflict of interest in its dealings with the company.
  3. https://www.finews.com/finance/36666-greensill-csam-softbank-side-letter-virtuoso-funds-finma-asia-apac

Russian Oligarchs

  1. Foreign authorities have launched criminal investigations into Greensill and Archegos, while the Swiss Financial Market Supervisory Authority (Finma) has opened inquiries.
  2. Purported class-action lawsuits have also been filed in the U.S. related to Archegos-Greensill. U.S. plaintiffs have also targeted Credit Suisse management and business relationships with Russian oligarchs.

SOURCE

https://www.finews.com/news/english-news/51828-credit-suisse-uk-regulator-watchlist?utm_source=linkedin&utm_medium=social&utm_campaign=dlvr.it

UNITED KINGDOM