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Swiss multinational bank

Credit Suisse Group AG (French pronunciation:[kʁeunic-brussels.euɥis], lit.&#;'Swiss Credit') is a global investment bank and financial services firm founded and based in Switzerland. Headquartered in Zürich, it maintains offices in all major financial centers around the world and provides services in investment banking, private banking, asset management, and shared services. It is known for strict bank–client confidentiality and banking secrecy. The Financial Stability Board considers it to be a global systemically important bank. Credit Suisse is also a primary dealer and Forex counterparty of the Federal Reserve in the United States.

Credit Suisse was founded in to fund the development of Switzerland's rail system. It issued loans that helped create Switzerland's electrical grid and the European rail system. In the s, it began shifting to retail banking in response to the elevation of the middle class and competition from fellow Swiss banks UBS and Julius Bär. Credit Suisse partnered with First Boston in before buying a controlling share of the bank in From to , the company purchased institutions such as Winterthur Group, Swiss Volksbank, Swiss American Securities Inc. (SASI), and Bank Leu.

The company was one of the least affected banks during the global financial crisis, but afterwards began shrinking its investment business, executing layoffs and cutting costs. The bank was at the center of multiple international investigations for tax avoidance (such as the famous "Suisse Secrets" scandal) which culminated in a guilty plea and the forfeiture of US$ billion in fines from to ^[9][10] By the end of , Credit Suisse had approximately CHF&#;&#;trillion in assets under management.^[6]

On 19 March , following negotiations with the Swiss government, UBS announced its intent to acquire Credit Suisse for $ billion (CHF 3 billion) in order to prevent the bank's collapse.^[11][12][13] UBS completed the acquisition in June ^[14]

History[edit]

Early history[edit]

Credit Suisse's founder, Alfred Escher, was called "the spiritual father of the railway law of ", for his work defeating the idea of a state-run railway system in Switzerland in favor of privatization.^[15][16] Escher founded Credit Suisse (originally called the Swiss Credit Institution, i.e., Schweizerische Kreditanstalt) jointly with Allgemeine Deutsche Credit-Anstalt on 5 July in ^[17] primarily to provide domestic funding to railway projects, avoiding French banks that wanted to exert influence over the railway system.^[18] Escher aimed to start the company with three million shares and instead sold million shares in three days.^[19] The bank opened on 16 July and was modeled after Crédit Mobilier, a bank funding railway projects in France that was founded two years prior, except Credit Suisse had a more conservative lending policy focused on short-to-medium term loans.^[18] In its first year of operation, 25 percent of the bank's revenues was from the Swiss Northeastern Railway, which was being built by Escher's company, Nordostbahn.^[20]

Credit Suisse played a substantial role in the economic development of Switzerland, helping the country develop its currency system,^[19] funding entrepreneurs^[16] and investing in the Gotthard railway, which connected Switzerland to the European rail system in ^[18] Credit Suisse helped fund the creation of Switzerland's electrical grid through its participation with Elektrobank (now called Elektrowatt), a coalition of organizations that co-financed Switzerland's electrical grid.^[21] According to The Handbook on the History of European Banks, "Switzerland's young electricity industry came to assume the same importance as support for railway construction 40 years earlier."^[18] The bank also helped fund the effort to disarm and imprison French troops that crossed into Swiss borders in the Franco-Prussian War.^[18][20] By the end of the war, Credit Suisse had become the largest bank in Switzerland.^[19]

Throughout the late s, Credit Suisse set up banking and insurance companies in Germany, Brussels, Geneva and others (as SKA International) with the bank as a shareholder of each company. It created insurance companies like Swiss RE, Swiss Life (aka Rentenanstalt) and Schweiz. Credit Suisse had its first unprofitable year in , due to losses in agriculture, venture investments, commodities, and international trade. The bank created its own sugar beet factory, bought 25, shares in animal breeding ventures and supported an export business, Schweizerische Exportgesellschaft, that experienced heavy losses for over-speculative investing.^[18][20]

In the early s Credit Suisse began catering to consumers and the middle-class with deposit counters, currency exchanges and savings accounts.^[20] The first branch outside of Zürich was opened in in Basel.^[16] The bank helped companies affected by World War I restructuring, and extended loans for reconstruction efforts.^[18][22] During the s depression, net profits and dividends were halved and employees took salary cuts.^[23] After World War II, a substantial portion of Credit Suisse's business was in foreign reconstruction efforts.^[23] Banks subsequently acquired by Credit Suisse have been linked to bank accounts used by members of the NSDAP in the s.^[24][25] Holocaust survivors had problems trying to retrieve assets from relatives that died in concentration camps without death certificates.^[26] This led to a class action lawsuit in ^[27] that settled in for $ billion.^{[28][29][30][31]} The Agreement on the Swiss Banks' Code of Conduct with Regard to the Exercise of Due Diligence was created in the s,^[16] after a Credit Suisse branch in Chiassowas exposed for illegally funneling $ million in Italian deposits to speculative investments.^[32]

Acquisitions, growth and First Boston[edit]

In , White, Weld & Company dropped its partnership with Credit Suisse after it was bought by Merrill Lynch. To replace the partnership with White, Credit Suisse partnered with First Boston to create Credit Suisse First Boston in Europe and bought a 44 percent stake in First Boston's US operations.^[33]

In , the Group acquired the blue chip London stockbrokers Buckmaster & Moore, originally established by aristocrat Charles Armytage-Moore and sportsman Walter Buckmaster, who had met at Repton School. As stockbrokers they were very well connected, had developed a good private client business, which at one time included John Maynard Keynes.

Other Credit Suisse First Boston brands were later created in Switzerland, Asia, London, New York and Tokyo.^[34][35] According to an article in The New York Times, First Boston became "the superstar of the Euromarkets" by buying stakes in American companies that wanted to issue bonds.^[35] In First Boston loaned $ million to Gibbons and Green for the purchase of the Ohio Mattress Company, which was purchased at twenty times its annual revenue. Gibbons had also borrowed $ million in junk bonds. When the junk bonds market crashed the following year, Gibbons couldn't repay First Boston.^[19] Credit Suisse injected $ million to keep First Boston in business,^[36] which ultimately led to the company being taken over by Credit Suisse.^{[citation needed]} This became known as the "burning bed" deal, because the Federal Reserve overlooked the Glass–Steagall Act that requires separation between commercial and investment banks in order to preserve the stability of the financial markets.^[19]

In the late s, Credit Suisse executed an aggressive acquisition strategy.^[16] The bank acquired Bank Leu, known as Switzerland's oldest bank, in ^[37][38] In Credit Suisse outbid UBS for a controlling stake in Switzerland's fifth largest bank, Swiss Volksbank in a $ billion deal.^[39] It also merged with Winterthur Group in for about $9 billion^[40] and acquired the asset management division of Warburg, Pincus & Co. in for $ million.^[41]Donaldson, Lufkin & Jenrette was purchased for $ billion in ^[16][42]

In , Credit Suisse restructured as the Credit Suisse Group with four divisions: Credit Suisse Volksbank (later called Credit Suisse Bank) for domestic banking, Credit Suisse Private Banking, Credit Suisse Asset Management, and Credit Suisse First Boston for corporate and investment banking. The restructure was expected to cost the company $ million and result in 7, lost jobs, but save $ million a year.^[43][44] While Credit Suisse First Boston had been struggling, Credit Suisse's overall profits had grown 20 percent over the prior year, reaching $ million.^[43] In Japan's Financial Supervisory Agency temporarily suspended the financial-products division's license to operate in Japan for "window dressing", the practice of selling derivatives that are often used by bank clients to hide losses.^[45]

In the s, Credit Suisse executed a series of restructures. In the bank was consolidated into two entities: Credit Suisse First Boston for investments and Credit Suisse Financial Services. A third unit was added in for insurance.^[16] Credit Suisse restructured again in under what it calls the "one bank" model. Under the restructuring, every board had a mix of executives from all three divisions. It also changed the compensation and commission models to encourage cross-division referrals and created a "solution partners" group that functions between the investment and private banking divisions.^[46] Following the restructure Credit Suisse's private banking division grew 19 percent per year despite the economic crisis. The firm bumped long-time rival UBS off the number one position in Euromoney's private banking poll.^[46] In , Credit Suisse acknowledged misconduct for helping Iran and other countries hide transactions from US authorities and paid a $ million settlement.^[47][48] The same year it merged Bank Leu AG, Clariden Holding AG, Bank Hofmann AG and BGP Banca di Gestione Patrimoniale into a new company called Clariden Leu.^[49]

The increasing importance of sustainability and the related commitments and liabilities of international standards such as the UNGC, of which the bank is a member, lead to increasingly sophisticated and ambitious risk management over the years. Credit Suisse operates a process which since uses RepRisk, a Swiss provider of ESG Risk analytics and metrics, to screen and evaluate environmental and social risks of risky transactions and due diligence.^[50]

In , Yellowstone Club founder Tim Blixseth sued Credit Suisse when the bank attempted to collect on $ million in loan debt during Yellowstone's bankruptcy proceedings.^[51] The debtor had borrowed more than $ million for the business, but used a large portion of it for personal use before eventually filing for bankruptcy.^[52] Four lawsuits were filed from other resorts seeking $24 billion in damages alleging Credit Suisse created loans with the intention of taking over their properties upon default.^[53]

Post-financial crisis[edit]

According to The Wall Street Journal in , "Credit Suisse survived the credit crisis better than many competitors."^[48] Credit Suisse had $ million in writedowns for subprime holdings and the same amount for leveraged loans,^[54] but it did not have to borrow from the government.^[55] Along with other banks, Credit Suisse was investigated and sued by US authorities in for bundling mortgage loans with securities, misrepresenting the risks of underlying mortgages during the housing boom.^[56][57] Following the crisis, Credit Suisse cut more than one-trillion in assets and made plans to cut its investment banking arm 37 percent by It reduced emphasis on investment banking and focused on private banking and wealth management.^[58][59] In July , Credit Suisse cut 2, jobs in response to a weaker than expected economic recovery^[60] and later merged its asset management with the private bank group to cut additional costs.^[61]

We sell [bank] safety not bank secrecy. Being a safe haven in a world that is becoming increasingly dangerous and volatile is no bad place to be.

—&#;Tidjane Thiam, chief executive of Credit Suisse, in a interview with the Bloomberg Markets^[62]

A series of international investigations took place in the early s regarding the use banking secrecy in Credit Suisse accounts for tax evasion. In , the Brazilian government investigated 13 former and current Credit Suisse employees.^[16] The investigation led to arrests that year and in as part of a larger crackdown in Brazil.^[63][64] Four Credit Suisse bankers were accused of fraud by the US Justice Department in for helping wealthy Americans avoid taxes.^[65][66] In , German authorities found that citizens were using insurance policies of a Bermuda-based Credit Suisse subsidiary to earn tax-free interest.^[67] In November , Credit Suisse's asset management division was merged with the private banking arm.^[68] In September , the Swiss government gave banks like Credit Suisse permission to provide information to the US Justice Department for tax evasion probes.^[69] In February , it agreed to pay a fine of $ million after one of its businesses served 8, US clients without registering its activities, leading to suspicion as to whether it was helping Americans evade taxes. It was one of 14 Swiss banks under investigation.^[70] Separately, in , German authorities began to probe Credit Suisse, its private bank subsidiary Clariden Leu, and its regional subsidiary Neue Aargauer Bank for helping German citizens evade taxes.^[71] In , the bank eventually entered into a € million settlement with the government.^[72]

In March , Credit Suisse denied claims it had been drawn into a Swiss competition probe investigating potential collusion to manipulate foreign exchange rates (Forex scandal) by various Swiss and foreign banks.^[73] In May , Credit Suisse pleaded guilty to conspiring to aid tax evasion. It was the most prominent bank to plead guilty in the United States since Drexel Burnham Lambert in and the largest to do so since the Bankers Trust in ^[74] "Credit Suisse conspired to help US citizens hide assets in offshore accounts in order to evade paying taxes. When a bank engages in misconduct this brazen, it should expect that the Justice Department will pursue criminal prosecution to the fullest extent possible, as has happened here," Attorney General Eric H. Holder said at the time.^[10] Holder also said "This case shows that no financial institution, no matter its size or global reach, is above the law." Credit Suisse shares rose 1% on the day the $ billion penalty was announced.^[75]

In March , it was announced that Tidjane Thiam, the CEO of Prudential would leave to become the next CEO of Credit Suisse.^[76] In September , Brian Chin was appointed Chief Executive of Global Markets and joined the executive board of the bank. At this time, it was also announced that Eric M. Varvel was appointed president and CEO of Credit Suisse Holdings (USA).^[77]

As of , share prices of Credit Suisse and other Swiss banks including UBS remained mostly stagnant or flat since the financial crisis. This is seen as a result of the aftermath of the collapse of Lehman Brothers, which caused a large loss in consumer and market participant trust and confidence in the banking industry. The loss in confidence is reflected in the large loss of share prices across the Swiss banking sector after , which have not recovered to pre-financial crisis levels.^[78]

In August , Credit Suisse announced the formation of a new "direct banking" business unit under their Switzerland division (Swiss Universal Bank, SUB), focusing on digital retail products. The step is seen as a reaction to the emergence of FinTech competitors such as N26 or Revolut in Switzerland and shall help to better attract young clients.^[79] In July , Thomas Gottstein, the new CEO of the company, announced restructuring; it was influenced as a result of the trading surge in Q2 of , amid the COVID pandemic. The planned restructuring is set "to reduce costs and improve efficiencies" and features some reverts of alterations brought by the previous CEO, Thiam. According to Gottstein, "These initiatives should also help to provide resilience in uncertain markets and deliver further upside when more positive economic conditions prevail."^[80]

On 9 February , the bank reported an annual loss of CHF bn, the biggest loss since the global financial crisis.^[81] On 14 March of that same year, Credit Suisse published its annual report for saying it had identified “material weaknesses” in controls over financial reporting.^[82]

Collapse[edit]

Main article: Acquisition of Credit Suisse by UBS

On 15 March , Credit Suisse' share price dropped nearly 25&#;percent after Saudi National Bank, its largest investor, said it could not provide more financial assistance.^[83] The market price of the bank's unsecured bonds set for maturity in dropped to a low of 33&#;percent of their par value on that day, down from being valued at 90&#;percent of their par value at the beginning of the month.^[84][85]

Later in the same week, Credit Suisse sought to shore up their finances by taking a loan of 50 billion Swiss francs from the Swiss National Bank (SNB);^[86][87] the bank later proceeded to buy three billion Swiss francs of its own debt and to put the Baur en Ville hotel in Zürich for sale.^[88] However, this intervention did not stop investors and customers from pulling their money out of Credit Suisse, with outflows topping 10 billion Swiss francs during the week,^[89][90] and almost $69 billion (approximately 61 billion Swiss francs) in withdrawals during the first calendar quarter.^[91] The situation was so compromised that the SNB and the Swiss government started discussions to fast-track the bank's acquisition by UBS.^{[92][93][94][95]} On 19 March , UBS announced a deal had been reached to acquire Credit Suisse for US$&#;billion (CHF&#;3 billion) in an all-stock deal.^[96]

European regulators have criticized the moral hazard of the AT1 bondholders suffering in the loss^[97] of their capital rather than the shareholders of the bank.^[98]

According to financial analysts, economic sanctions imposed by Switzerland on Russian individuals and businesses had a significant impact on the demise of the bank. According to Bloomberg News, Credit Suisse held about $33 billion for Russian clients, 50% more than UBS.^[99]

In late April , the political and economic fall-out had been evaluated by a number of economic analysts, particularly the resulting lack of banking competition in Switzerland's economy. The take-over by UBS had limited the choice of lenders, particularly for smaller and medium sized companies. Credit Suisse's international reach had affected the employment situation in Europe as well as other regions. The Swiss economy as such also relies on a number of heavily capitalised state banks that have been a significant lender to those smaller enterprises, particularly after the demise of CS.^[][]

Post-acquisition[edit]

On 27 June , UBS announced its intention to cut more than half of Credit Suisse's workforce.^[]

Leadership history[edit]

Credit Suisse's leadership history unfolds through visionary leaders like Alfred Escher, who founded the bank in Hermann Heller's international focus during and August Rust's diversification from laid crucial foundations. Edwin Stopper's strategies in brought challenges amid expansion into global markets.

Lukas Muhlemann's cost-cutting efforts in faced setbacks, and Oswald Grubel grappled with restructuring post crisis during Tidjane Thiam's wealth management focus in faced external challenges, leading to resignation. Tomas Gottstein, since , tackles geopolitical tensions, emphasizing sustainability while navigating regulatory changes for investor confidence. Understanding Credit Suisse's leadership involves considering broader industry trends and key advisors beyond CEOs.^[]

Chairpeople[edit]

Chief executives[edit]

• Rainer Gut, –
• Robert A. Jeker&#;[de], –
• Josef Ackermann, –
• Lukas Mühlemann, January –December
• John J. Mack, January –July
• Oswald Grübel, January –May (co-CEO with Mack in –)
• Brady Dougan, May –June
• Tidjane Thiam, June –February
• Thomas Gottstein, February –July
• Ulrich Körner, July –present

Corporate structure[edit]

Credit Suisse Group AG, is organised as a joint-stock company registered in Zürich that operates as a holding company. It owns the Credit Suisse bank and other interests in the financial services business. Credit Suisse is governed by a board of directors, its shareholders, and independent auditors. The Board of Directors organise the annual General Meeting of Shareholders while investors with large stakes in the company determine the agenda. Shareholders elect auditors for one-year terms,^[] approve the annual report and other financial statements, and have other powers granted by law.^[] Shareholders elect members of the board of directors to serve a three-year term based on candidates nominated by the Chairman's and Governance Committee and the Board of Directors meet six times a year to vote on company resolutions.^[] The Board sets Credit Suisse's business strategies and approves its compensation (remuneration) principles based on guidance from the compensation committee.^{[citation needed]} It also has the authority to create committees that delegate specific management functions.^{[citation needed]}

Credit Suisse has two divisions, Private Banking & Wealth Management and Investment Banking. A Shared Services department provides support functions like risk management, legal, IT, and marketing to all areas. Operations are divided into four regions: Switzerland, Europe, the Middle East, and Africa, the Americas, and the Asian Pacific. Credit Suisse Private Banking has wealth management, corporate and institutional businesses. Credit Suisse Investment Banking handles securities, investment research, trading, prime brokerage, and capital procurement. Credit Suisse Asset Management sells investment classes, alternative investments, real-estate, equities, fixed income products, and other financial products.^[]

On 9 May , Credit Suisse announced that it would continue its banking operations but under the hospice of UBS in order to fulfill its financial obligations towards existing clients as well as employees of both banks. CEO Ulrich Körner will join UBS's executive board.^[]

Ownership[edit]

In August , it was revealed that the largest shareholder of Credit Suisse was in fact American, namely Harris Associates, holding over 10% of the shares of the group. Harris Associates itself is owned by French bank Natixis.^[]

As of 25 January , Saudi National Bank, an anchor investor, held a 10 per cent stake, Qatar Investment Authority (QIA) boosted its stake in the Credit Suisse Group to per cent and Harris Associates reported a holding of below 3 per cent.^[] Harris Associates reported having exited all its Credit Suisse positions by March ^[] Credit Suisse stock (CS) in the NYSE fell from $ to $ a share on 15 March ^[]

On 19 March , fellow Swiss bank group UBS agreed to buy Credit Suisse for more than US$3&#;billion.^[96] The purchase of Credit Suisse by UBS has reportedly averted a greater crisis, according to SNB.^[]

Financial products[edit]

Credit Suisse endorses a strategy called bancassurance of trying to be a single company that offers every common financial services product.^[][] The investment bank is intended for companies and wealthy individuals with more than 50, euro.^[]

Credit Suisse developed the CreditRisk+ model of risk assessment in loans, which is focused exclusively on the chance of default based on the exogenous Poisson method.^[] As of about 20 percent of Credit Suisse's revenue was from its insurance business it gained through the acquisition of Winterthur.^[] The investment bank's insurance products are primarily popular in the domestic market and include auto, fire, property, life, disability, pension and retirement products among others.^[] Historically 20–40 percent of the bank's revenue has been from private banking services, one of its higher profit-margin divisions.^[]

Credit Suisse produces one of the six hedge funds following European stock indices that are used to evaluate the performance of the markets.^[][] The investment bank also has a 30 percent ownership in hedge fund investment firm York Capital Management. York sells hedge funds independently to its own clients, while Credit Suisse also offers them to private banking clients.^[] Credit Suisse manages the financial instruments of the Dow Jones Credit Suisse long/short equity index (originally called Credit Suisse/Tremont Hedge Fund Indexes).^[]

According to a article in Seeking Alpha, Credit Suisse's investment managers favor financial, technology and energy sector stocks.^[] The bank's head of equity investments in Europe said the team focuses on "value with an emphasis on free cashflow". She also has an interest in companies undergoing management changes that may influence the stock price.^[] According to a story in The Wall Street Journal, the head of Credit Suisse's International Focus Fund keeps a portfolio of only 40–50 stocks, instead of the industry-norm of more than ^[] Credit Suisse publishes its investment advice in four publications: Compass, Viewpoints, Research and the Credit Suisse Investment Committee Report.^[]

On 5 May , Credit Suisse announced it would buy Ecuadorian bonds worth $ billion in a debt-for-nature swap that costs the Swiss bank only $ million. As a result, the government of Ecuador pledged to spend about $18 million annually for two decades on conservation in the Galapagos islands, a UNESCO world heritage site. The bond purchase was below 55% of the purchase value and below % for the consecutive 5 year-intervals after Underwriters for that deal is the Inter-American Development Bank (IDB) and the U.S. International Development Finance Cooperation, therefore limiting the risk for Credit Suisse. The deal effectively saves Ecuador from liquidity shortages due to an estimated public debt of $ billion. In April , Ecuador repaid $1 billion of loans made two years earlier by Goldman Sachs and Credit Suisse.^[]

Reputation and rankings[edit]

The reputation of the bank is controversial. From the s until into the s, beside regular customers, Credit Suisse offered criminals, corrupt politicians and controversial secret service chiefs a safe haven for their assets, despite all public declarations of a "white money" strategy.^[]

Until its acquisition by UBS in , Credit Suisse was a member of Wall Street's bulge bracket, a list of the largest and most profitable banks. The company was one of the world's most important banks, upon which international financial stability depends.^[][] The bank was also one of Fortune Magazine's most admired companies.^[]

As of , Credit Suisse was first in volume of high-yield transactions, second for corporate high-yield bond insurance and third for IPO underwriting.^[] As of , Credit Suisse was recognised as the world's best private bank by Euromoney's Global Private Banking Survey^[] and as the best European Equity Manager by Global Investors.^[] In polls by Euromoney, it has been ranked as the top private bank and the best bank in Switzerland.^[46] In , the Securities Data Company ranked Credit Suisse as the fourth best place for financial advice for mergers and acquisitions in the US and sixth for domestic equity issues.^[43] Credit Suisse was recognized by the Asset Triple A Awards and in it was ranked as the second best prime broker by Institutional Investor.^[]

An investigation in February by The Guardian following the Suisse Secrets leaks revealed that Credit Suisse was holding bank accounts for many criminals, fraudsters and corrupt politicians.^[]

In early September , UBS had clearly profited from the takeover as its stocks were increasingly valuable. From April to July, UBS made a record profit of billion CHF and its stocks, which were initially depressed after the fusion, were traded at much higher prices. The record profit was based on the difference between the purchase price of Credit Suisse stocks and the apparently higher value of its assets.^[]

Controversies[edit]

Mismarking, [edit]

In , two Credit Suisse traders pleaded guilty to mismarking their securities positions to overvalue them by $3 billion, avoid losses, and increase their year-end bonuses.^[][][] Federal prosecutors and the Securities and Exchange Commission charged that the traders' goal was to obtain lavish year-end bonuses that the mismarking would lead to.^[][] The traders engaged in what The New York Times called "a brazen scheme to artificially increase the price of bonds on their books to create fictitious profits".^[] A team of traders, facing an inquiry from Credit Suisse's internal controls Price Testing group, justified their bond portfolio's inflated value by obtaining "independent" marks from other banks' trading desks.^[][]

The traders secured sham "independent" marks for illiquid securities that they held position in from friends who worked at other financial firms.^[][][] Their friends generated prices that valued a number of bonds at the prices that the traders requested, which the traders then recorded as the true value of the bonds.^[][] The bank was not charged in the case.^[] Credit Suisse's outside auditor discovered the mismarkings during an audit.^[] Credit Suisse took a $ billion write-down after discovering their traders' mismarking.^[]

International Emergency Economic Powers Act and New York State Law violations, [edit]

On 16 December , it was announced that the US Department of Justice (DOJ) reached a settlement with Credit Suisse over accusations that the bank assisted residents of International Emergency Economic Powers Act sanctioned countries to wire money in violation of the Act as well as New York law from to The settlement resulted in Credit Suisse forfeiting $ million.^[]

US tax fraud conspiracy, , [edit]

See also: Banking in Switzerland §&#;Loopholes

In , Credit Suisse pleaded guilty to conspiring with Americans to file false tax returns. Credit Suisse subsequently paid $ billion in fines and restitution.^[] It was reported in that the US DOJ had opened an investigation into whether the bank continued to assist clients hide assets from tax authorities despite the terms of the settlement.^[] According to the DOJ in , Credit Suisse violated a plea agreement with US authorities by failing to report secret offshore accounts that wealthy Americans used to avoid paying taxes.^[]

Malaysia Development Berhad scandal, [edit]

See also: 1Malaysia Development Berhad scandal

In September Hong Kong police began investigations regarding $&#;million in Credit Suisse branch deposits in Hong Kong linked to former Malaysia's Prime Minister Najib Razak and Malaysian sovereign wealth fund, 1Malaysia Development Berhad (1MDB).^[] In , Singapore fined Credit Suisse a total of S$m (£m, $m, €m).^[] In May , Reuters reported that "Swiss financial watchdog FINMA had conducted "extensive investigations" into Credit Suisse's dealings surrounding 1MDB".^[] In FINMA issued a complaint to Credit Suisse.^[]

Mozambique secret loans scandal, [edit]

Main article: Tuna bonds

Between and , Credit Suisse brokered US$ billion of loans with Mozambican finance minister Manuel Chang, to develop the country's tuna fishing industry. The loans were issued as bonds to be paid off by the income from tuna fishing as well as the country's nascent natural gas industry. Chang lied to investors, his own government, the IMF and the banks issuing the loans, including Credit Suisse.^[] Credit Suisse was fined almost US$ million by UK, US and European regulators for a lack of transparency in the issuing of the bonds, for kickbacks benefitting Credit Suisse bankers and for enabling loans likely to be embezzled by Mozambican officials, including Chang. In October , Credit Suisse pled guilty to wire fraud and agreed to forgive US$ million in debt owed by Mozambique to the bank.^[]

US Foreign Corrupt Practices Act violation, [edit]

On 5 July , Credit Suisse agreed to pay a $47 million fine to the US Department of Justice and $30 million to resolve charges of the US Securities and Exchange Commission (SEC). The SEC's investigation said that the banking group sought investment banking business in the Asia-Pacific region by hiring and promoting more than one hundred Chinese officials and related people in violation of the Foreign Corrupt Practices Act.^[][]

Climate controversy, [edit]

See also: Climate justice

In November , about a dozen climate activists played tennis inside Credit Suisse agencies (of Lausanne, Geneva and Basel simultaneously), disrupting operations as a protest against the bank's investments in fossil fuels.^[][] Credit Suisse lodged a complaint and the activists from Lausanne were tried in January and fined 21, CHF. They were later cleared of all charges in what a Swiss media outlet considered a 'historical decision'.^[][][][][]

The tennis theme was chosen to urge Swiss tennis star Roger Federer to break his connection with Credit Suisse as a sponsor due to the company's participating in the climate crisis (notably by multiplying fold its financing for coal from to ).^[][] On 11 January , Federer published a statement saying: "[] I have a great deal of respect and admiration for the youth climate movement, and I am grateful to young climate activists for pushing us all to examine our behaviours", and further committed to a dialogue with his sponsors on social issues.^[]

On 24 January , following the trial, the climate activist group emitted a press statement requesting a transparent, televised debate with the CEO of Credit Suisse. With no answer from the bank, they created a website under the name "DiscreditSuisse" hosting content pertaining to Credit Suisse's record on climate issues.^[]

Private spying scandal, [edit]

In , a senior executive who was leaving the firm discovered that Pierre-Olivier Bouée, the chief operating officer (COO) of Credit Suisse at the time, had hired private detectives to follow him to see if he was wooing Credit Suisse clients.^[] Bouée was fired, and a private investigator involved in the surveillance apparently killed himself.^[]

Greensill Capital, [edit]

Main article: Greensill Capital

In March , Credit Suisse closed and liquidated several supply-chaininvestment funds tied to the activities of Greensill Capital. The investors in the funds, which totalled assets of approximately $10 billion, were expected to lose $3 billion as of March ^[] Credit Suisse has returned around $ billion to investors in its Greensill-linked funds.^[]

Archegos Capital, [edit]

In April , at least seven executives were removed from their posts after Credit Suisse reported losses of $ billion linked to its prime brokerage services provided to Archegos Capital. The executives who departed included Lara Warner, the group's chief risk and compliance officer, and Brian Chin, head of the investment bank.^[] Just prior to Credit Suisse's Annual General Meeting, Andreas Gottschling, head of the board's risk committee, also stood down.^[] In July , Credit Suisse's parent UBS was fined $&#;million by the Federal Reserve and $&#;million by the Bank of England for its failure in risk management.^[]

Forex manipulations conviction, [edit]

In , Credit Suisse was fined € million for forex rates manipulation by the European Union Commission on Competition because of its participation in a cartel detrimental to EU consumers and involving several other large international banks.^[][] In October , a US jury found that Credit Suisse did not collude with other banks to manipulate forex rates, in a class-action trial.^[][]

Drug money laundering scandal, [edit]

On 7 February , it was announced that Credit Suisse would be tried in the first criminal trial of a major bank in Switzerland. Swiss prosecutors are seeking around 42 million Swiss francs ($45 million) in compensation from Credit Suisse for allowing a Bulgarian cocaine trafficking gang around Evelin Banev to launder millions of Euros of cash between and ^[] On 27 June , the bank as well as one of its former employees was found guilty by the Federal Criminal Court of Switzerland for not doing enough to prevent the crime from taking place.^[] The court imposed a fine of CHF&#;2&#;million and ordered the confiscation of assets worth more than CHF&#;12&#;million that the drug gang held in accounts at the bank; and to relinquish over CHF&#;19&#;million — the amount that could not be confiscated due to internal deficiencies at the bank.^[] The bank said it would appeal against the verdict.^[]

Suisse secrets leak, [edit]

Main article: Suisse Secrets

In February , details of 30, customers holding over bn Swiss francs (£80bn) in accounts at the bank were leaked to the Süddeutsche Zeitung, and became known as "Suisse Secrets".^[] Among those with accounts at the bank were a human trafficker,^[] a torturer, drug traffickers and a Vatican-run account that allegedly invested €m fraudulently in London property.^[] On 20 February, Credit Suisse said it "strongly rejects" allegations of wrongdoing.^[]

Russian oligarch loans documents destruction after invasion of Ukraine, [edit]

Following Swiss sanctions on Russia during the Russian invasion of Ukraine, Credit Suisse issued legal requests asking hedge funds and other investors to destroy documents linking Russian oligarchs to yacht loans, a move for which they faced considerable criticism.^[] The US House Oversight Committee launched a probe into the firm demanding documents linked to the bank's compliance with sanctions on Russian oligarchs.^[]

Social media rumours, [edit]

In early October , Credit Suisse stocks came under considerable pressure when rumours on social media projected the demise of the bank. According to financial analysts, the bank has a “strong capital base and liquidity position”. Nevertheless, the Swiss National Bank vowed to follow the situation closely. European finance experts in particular talked of a "self-fulfilling risk" since liquidity is not a problem for the Swiss bank. CS had suffered severe losses in from the Archegos and Greensill financial scandals that implicated former Archegos executives with racketeering conspiracy, securities fraud and wire fraud.^[]

On 7 October , the bank offered to buy back US$3 billion worth of debt, and put Zurich's Savoy Hotel on sale, which was later purchased by wealthy Arab officials.^[] The bank's current chairman, Axel Lehmann, also assured investors that the bank was stable after wealthy clients began moving their assets out of the bank.^[] In the fall-out from the falling stock prices, insiders believed that Saudi prince Mohammed bin Salman was looking to invest almost US$ million into the bank, but had to withdraw his offer due to regulatory concerns.^[]

NSDAP accounts, [edit]

In Credit Suisse stopped internal investigation into its Nazi clients and other Nazi-linked accounts facing much condemnation of the U.S. Senate Budget Committee and Holocaust survivors among others.^[] According to the most recent Senate report at least 14 of these stayed open until s.^[] In and , both the Bergier Commission and the Volcker Committee had investigated the same remaining accounts related to the Swiss banks' dealing with Nazi Germany. Those settlements had resulted in the payment of USD billion by UBS, Credit Suisse and other Swiss banks to , Holocaust victims, and , victims of the Slave Labor Class action lawsuit.^[]

Work environment[edit]

Credit Suisse is more internationally minded than most European banks.^[30][] According to WetFeet's Insider Guide, Credit Suisse offers more travel opportunities, greater levels of responsibility and more client interaction than new employees get at competing firms but is known for long hours. Analysts report to hour work-weeks.^{[citation needed]}

Roles and responsibilities are less stringent and the environment is pleasant despite hours being "the most grueling on Wall Street".^[] Vault's Insider's Guide reached similar conclusions, noting above-average training, executive access and openness matched with reports of to hour work-weeks.^[]

In , the bank made moves to pay bonuses to top executives and senior bankers upfront but included an added condition that they needed to stay with the bank for three years or else they would need to pay the bonus, or some of the bonus, back to the company.^[][] Later the Swiss federal government, as well as the last General Assembly of Credit Suisse shareholders voted to withdraw or seriously reduce bonus payments to top management.^[]

See also[edit]

References[edit]

Feb 3 (Reuters) - Swiss federal prosecutors have launched criminal proceedings targeting the perpetrators of a leak of information on thousands of Credit Suisse (CSGN.S), opens new tab accounts, they said on Friday.

The leak covered more than 18, accounts, including human rights abusers, fraudsters and businessmen subject to sanctions, thereby plunging Switzerland's biggest bank into a dirty money scandal.

The accounts, which were held from the s to the s, were leaked last February to Germany's Sueddeutsche Zeitung, which shared it with media organisations worldwide.

The identity of the person or organisation responsible for the leak remains unknown.

Prosecutors said the alleged offences in the case were violation of banking secrecy laws, damage caused to Credit Suisse and making confidential business information available to foreign organisations or their agents.

They took action after receiving a formal complaint.

Swiss daily Tagesanzeiger cited sources as saying the bank, which is working to revive its fortunes after a series of scandals and heavy losses, was the complainant.

Asked whether Credit Suisse had submitted the complaint, a spokeswoman said the bank did not comment on ongoing proceedings.

Our Standards: The Thomson Reuters Trust Principles., opens new tab

Crédit Agricole S.A. and Santander have signed a memorandum of understanding with a view to combining their custody and asset servicing operations. The new entity would combine CACEIS, the custody and asset servicing business of Crédit Agricole S.A., and the Spanish, Brazilian, Mexican and Colombian activities of S3, Santander’s custody and asset servicing business.

The transaction would combine two strong custody and asset servicing players to form a truly global player with enhanced growth prospects.

The transaction would entail the contribution of % of S3 Spain and % of S3’s operations in Latin America to CACEIS. As a result of this contribution, Crédit Agricole S.A. and Santander would hold % and % of CACEIS, respectively. The Latin American operations of S3 would be jointly controlled by CACEIS and Santander.

The combined CACEIS and S3 businesses would deliver scale and stronger competitive positioning as it benefits from enhanced geographical presence, the full coverage of the value chain and an expanded offering for both existing and new clients. The enlarged group would be better placed to capture growth in high potential markets (Latin America and Asia) and new opportunities. This enhanced growth potential combined with expected commercial and industrial synergies should result in long-term value creation for all stakeholders.

The enlarged group would continue to leverage on strong teams from both organisations with Jean-Francois Abadie, current CEO of CACEIS, as Chief Executive Officer of the new enlarged entity and Carlos Rodriguez de Robles, current General Manager for S3, leading the Spanish and Latin American activities.

The signature of the final agreements between Crédit Agricole S.A. and Santander requires prior consultation with the relevant works councils.

The completion of the contemplated transaction will be subject to customary closing conditions, including regulatory approvals, and is expected to take place by the end of

It is anticipated that the impact on both capital and on earnings per share will not be material, for both parties.

Ana Botín, Executive Chairman of Santander, said: “We are delighted to enter into this partnership with Crédit Agricole. S3 and CACEIS are highly complementary businesses, and by working together we can create a custody and asset servicing platform that leverages our collective scale and global presence, and offers clients a comprehensive service that can support their ambitions and help them to prosper.”

Philippe Brassac, CEO of Crédit Agricole S.A. on the transaction: « The contemplated combination of CACEIS and S3 is yet another illustration of Crédit Agricole’s continued focus on delivering a strong industrial partnership model with a view to creating outstanding platforms across our key business lines. We are very proud to envisage this long-term collaboration with Santander in order to create a major player in custody and asset servicing with further growth prospects for the group. »

Jean-François Abadie, CACEIS CEO commented: « We are delighted by the envisaged combination with the S3 teams with whom we share the same vision of the industry. CACEIS and S3 are highly complementary from a geographic, client and service offering perspective. With very similar cultural and industrial approaches, our two organisations, once united, would deliver significant value for all our stakeholders. »

Carlos Rodriguez de Robles, General Manager for S3, said: “The new business will offer clients a comprehensive and strengthened value proposition, combining a deep industry expertise and ample product portfolio, with a profound knowledge and presence across our local markets.  I am convinced the new entity will be a source of value creation for our shareholders and a great opportunity for the growth and development of our people.”

****

About CACEIS
CACEIS is the asset servicing banking group of Crédit Agricole dedicated to institutional and corporate clients. Through offices across Europe, North America and Asia, CACEIS offers a broad range of services covering execution, clearing, forex, securities lending, depositary and custody, fund administration, fund distribution support, middle office outsourcing and issuer services. With assets under custody of € tn and assets under administration of € tn, CACEIS is a European leader in asset servicing and one of the major players worldwide (figures as of 31 December ). eunic-brussels.eu

About S3
Santander Securities Services (“S3”) is the asset servicing bank of Grupo Santander. With a local presence in Spain, Brazil, Mexico and Colombia, S3 is a leading player in these markets, with € bn of assets under custody and € bn of assets under administration (figures as of 31 December ). eunic-brussels.eu