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Credit Suisse ignored more than 100 red flags, says regulator

credit suisse
Keystone / Urs Flueeler

A report by the Swiss financial regulator FINMA claims that the bank had ignored over 100 warnings of potential breach of regulations. 

On Sunday, the NZZ am Sonntag paper reported that the management of Credit Suisse had overlooked breaches of regulations for years and that bank leads the pack when it comes to the most ongoing FINMA investigations. 

In recent years, FINMA has initiated five proceedings against the bank to remedy these omissions. The most recent cases concern the billions lost via the Greensill and Archegos funds. There have also been investigations into money laundering and executive espionage. A report shows that Credit Suisse ignored more than 100 red flags in total.

The SonntagsBlick paper highlighted one such red flag around the time when Urs Rohner was head of the board of directors. It concerns a client advisor who managed the funds of wealthy Eastern Europeans that earned the bank some CHF25 million francs a year. According to the SonntagsBlick, he was alleged to have invested his clients’ assets in high-risk investments without their knowledge, falsified documents and lined his own pockets in the process. Despite warnings, he allegedly continued to work for the bank and was only fired in 2015 after making massive speculations.

The SonntagsZeitung paper wrote that the bank’s heavy losses also have political consequences. The Credit Suisse issue is on the agenda of the House of Representatives’ economic committee next week. The main topic for discussion will be whether and how the regulation of the big banks should be strengthened. The greatest need for action is in the area of risk management, where there are clear gaps. A member of FINMA will also be present to answer questions.
 

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