Swiss Regulatory Authority Find Credit Suisse In Serious Violation Regarding Greensill Debacle

by Vandana Singh, Benzinga Editor
February 28, 2023 5:55 AM | 1 min read |
  • The Swiss Financial Market Supervisory Authority FINMA has concluded its enforcement proceedings against Credit Suisse Group AG CS concerning its business relationship with financier Lex Greensill and his companies. 
  • FINMA finds that Credit Suisse seriously breached its supervisory obligations in this context concerning risk management and appropriate organizational structures. 
  • "In its proceedings, FINMA concluded that Credit Suisse seriously breached its supervisory duty to adequately identify, limit and monitor risks in the context of the business relationship with Lex Greensill over a period of years," adding that it also found "serious deficiencies in the bank's organizational structures" during the period under investigation.
  • "Furthermore, it did not sufficiently fulfill its supervisory duties as an asset manager. FINMA thus concludes that there has been a serious breach of Swiss supervisory law."
  • The regulator said that from now on, the bank's most important (approximately 500) business relationships would be reviewed periodically for counterparty risks at the executive board level.
  • The bank's 600 most senior managers must also have their areas of responsibility recorded in a document of responsibility and must be sanctioned by the bank.
  • Credit Suisse CEO Ulrich Körner welcomed the conclusion of the FINMA investigation.
  • In March 2021, Credit Suisse closed four funds related to companies of Greensill. Immediately after the closure of the funds in March 2021, Finma took various risk-reducing measures and opened enforcement proceedings.
  • So far, $7.4 billion of the fund's $10 billion net asset value at the time of its suspension has been collected.
  • Price Action: CS shares are down 0.98% at $3.03 during the premarket session on the last check Tuesday.
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