Credit Suisse faces new cultural scrutiny after customer data leaked

The logo of Swiss bank Credit Suisse is seen at its headquarters in Zurich, Switzerland on March 24, 2021.

Arnd Wiegmann | Reuters

LONDON – Credit Suisse is facing renewed scrutiny from Swiss regulators and the European Parliament after Leaked data for bank visibility has served human rights violators, corrupt politicians and businessmen under sanctions for decades.

The Swiss bank has denied any wrongdoing and said it “strongly denies” the allegations published by dozens of global media outlets following a coordinated investigation. The client data leak was initially submitted to a German newspaper before being picked up by the Organized Crime and Corruption Reporting Project and 46 other news organisations.

Credit Suisse said the follow-up report, titled “Secrets of Suisse,” details the issues “mostly historical” and is based on “partial, inaccurate or selective information released to the public.” context, leading to biased interpretations of the bank’s business.”

“About 90% of the accounts under review are currently closed or in the process of being closed prior to receiving a press request, of which more than 60% were closed prior to 2015.

Swiss regulator FINMA said it was aware of the articles, though could not comment on individual media reports.

“We can confirm that we are in contact with the bank in this context. Compliance with money laundering regulations has been at the heart of our oversight activities for many years now. We refer to FINMA’s measures and processes in the context of anti-money laundering in recent years,” added FINMA.

Meanwhile, the European People’s Party (EPP) – the conservative group that commands the largest number of seats in the European Parliament – on Monday urged the European Commission to “reassess Switzerland as a country at risk”. high levels of money laundering”, suggesting they could be placed on the EU’s blacklist of countries with a reputation for dirty money laundering.

Markus Ferber, EPP’s coordinator for economic affairs, said: “The findings of ‘Swiss Confidential’ point to major shortcomings of Swiss banks when it comes to anti-money laundering.

“When Swiss banks fail to properly apply international anti-money laundering standards, Switzerland itself becomes a high-risk country.”

In Its recent earnings report and the consequences of resignation of former president Antonio Horta-Osorio – who was found to have broken Covid-19 isolation rules on multiple occasions – Switzerland’s second-largest bank has emphasized its focus on overhauling its corporate culture.

Bank has been badly burned by litigation costs in Q4 2021 as fallout continues to be linked to collapse US hedge fund Archegos Capital and insolvent supply chain finance company Greensil.

This resulted in Credit Suisse setting up “1.1 billion Swiss francs ($1.2 billion) worth of political litigation terms and posting a full-year net loss of 1.57 billion Swiss francs for the year.” 2021.

Thomas Gottstein, newly appointed CEO of Swiss bank Credit Suisse attends an interview with Reuters in Zurich, Switzerland on February 7, 2020.

Arnd Wiegmann | Reuters

Credit Suisse also recently became the first Swiss bank to respond to criminal charges and faces a court case involving millions of euros allegedly laundering money for drug cartels since 2004. until 2008.

Last week, a banker accused of money laundering told the court that Credit Suisse was aware of murders and cocaine trafficking allegedly linked to a Bulgarian mafia organization, but continued to manage the amount of cash in question. Both the banker and Credit Suisse deny any wrongdoing.

In October 2021, FINMA concluded its investigation into a number of legacy anti-money laundering issues dating back to decades prior to 2014 and several issues from 2016 to 2019. measures for the group and continue to monitor their implementation.

Scandals have plagued Credit Suisse for years. Former CEO Tidjane Thiam resigns in early 2020 after a strange espionage story that also leads to the death of a contractor and the overthrow of its COO Pierre-Olivier Bouee.

Horta-Osorio is put on the right ship in regards to corporate culture, only to be forced to resign himself. Chief Executive Officer Thomas Gottstein told CNBC following the bank’s latest earnings report that proper risk control and management was a top priority after a “challenging year.”

‘Extremely weak risk management’

Shares of Credit Suisse are down more than 9.5% year-to-date and trade at a discount to its peers, at about 0.47% below the European industry average. .

DBRS Morningstar, which includes Credit Suisse stock, told CNBC on Monday that the recent news “highlights additional risk management shortcomings at Credit Suisse, including anti-money laundering procedures, a lack of audits, and a lack of control. internal control and management accountability.”

“We believe this news adds to the significant setbacks observed in 2021 and points to extremely weak risk management and control at the Group level and across other business sectors. each other, including Wealth Management, after the Archegos incident in Investment Banking and Supply Funds Maria Rivas, senior vice president of financial institutions at DBRS Morningstar, told CNBC it was a chain problem in management. asset.

“This is another blow to CSG and its new Chairman and management team, who are trying to make a head start and have announced a transition year 2022 to restore confidence and improve management.” risk management.”

Rivas suggested that despite the new management’s focus on overhauling the bank’s controls and risk culture, these changes could “take years to materialize” given the complexity and the size of the group’s global structure.

She added. Credit Suisse faces new cultural scrutiny after customer data leaked

Gary B. Graves

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