Credit Suisse 'seriously breached' duty in Greensill affair: watchdog

Credit Suisse 'seriously breached' duty in Greensill affair: watchdog

Switzerland's second biggest bank has seen its asset management branch rocked by the bankruptcy of Greensill
Switzerland's second biggest bank has seen its asset management branch rocked by the bankruptcy of Greensill. Photo: Fabrice COFFRINI / AFP/File
Source: AFP

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Credit Suisse "seriously breached its supervisory obligations" regarding risk management in its business relationship with financier Lex Greensill and his companies, the Swiss financial watchdog said Tuesday.

Switzerland's second biggest bank has seen its asset management branch rocked by the bankruptcy of British financial firm Greensill, which it had committed some $10 billion in through four funds.

The Finma financial watchdog said in a statement that it had closed its inquiry but had ordered "remedial measures".

Four enforcement proceedings have been opened against former Credit Suisse managers, it said.

After the closure of several Greensill investment funds which had been presented to investors as low risk, the bank will have to "periodically review at executive board level the most important business relationships (around 500) in particular for counterparty risks", Finma said.

"The bank is required to record the responsibilities of its approximately 600 highest-ranking employees in a responsibility document," it added.

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Chief executive Ulrich Korner -- who was brought in to overhaul the bank which has been plagued by several scandals -- welcomed the conclusion of the Finma inquiry.

He said in a statement that it "reinforced" many of the findings of a board-initiated independent review.

Korner also said it "underlines the importance of the actions we have taken in recent years to strengthen our risk and compliance culture".

"We also continue to focus on maximising recovery for fund investors."

Of the $10 billion invested through the four funds in Greensill, the bank said it had now recovered $7.4 billion, or 74 percent of the total.

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Source: AFP

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