Credit Suisse
   HOME

TheInfoList



OR:

Credit Suisse Group AG is a global
investment bank Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort. In finance, the purpose of investing is ...
and
financial services Financial services are the Service (economics), economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, acco ...
firm founded and based in Switzerland. Headquartered in
Zürich Zürich () is the list of cities in Switzerland, largest city in Switzerland and the capital of the canton of Zürich. It is located in north-central Switzerland, at the northwestern tip of Lake Zürich. As of January 2020, the municipality has 43 ...
, it maintains offices in all major financial centers around the world and is one of the nine global " Bulge Bracket" banks providing services in
investment bank Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort. In finance, the purpose of investing is ...
ing,
private banking Private banking is banking, investment and other financial services provided by banks and financial institutions primarily serving high-net-worth individuals (HNWIs)—defined as those with very high levels of income or sizable assets. A bank that ...
,
asset management Asset management is a systematic approach to the governance and realization of value from the things that a group or entity is responsible for, over their whole life cycles. It may apply both to tangible assets (physical objects such as buildings ...
, and
shared services Shared services is the provision of a service by one part of an organization or group, where that service had previously been found, in more than one part of the organization or group. Thus the funding and resourcing of the service is shared and th ...
. It is known for strict bank–client confidentiality and banking secrecy. The
Financial Stability Board The Financial Stability Board (FSB) is an international body that monitors and makes recommendations about the global financial system. It was established after the 2009 G20 London summit, G20 London summit in April 2009 as a successor to the Fi ...
considers it to be a global systemically important bank. Credit Suisse is also
primary dealer A primary dealer is a firm that buys government securities directly from a government, with the intention of reselling them to others, thus acting as a market maker of government securities. The government may regulate the behaviour and number of ...
and
Forex The foreign exchange market (Forex, FX, or currency market) is a global decentralized or over-the-counter (OTC) market for the trading of currencies. This market determines foreign exchange rates for every currency. It includes all as ...
counterparty of the Fed. Credit Suisse was founded in 1856 to fund the development of Switzerland's rail system. It issued loans that helped create Switzerland's
electrical grid An electrical grid is an interconnected network for electricity delivery from producers to consumers. Electrical grids vary in size and can cover whole countries or continents. It consists of:Kaplan, S. M. (2009). Smart Grid. Electrical Power ...
and the European rail system. In the 1900s, it began shifting to
retail banking Retail banking, also known as consumer banking or personal banking, is the provision of services by a bank to the general public, rather than to companies, corporations or other banks, which are often described as wholesale banking. Banking servi ...
in response to the elevation of the middle class and competition from fellow Swiss banks
UBS UBS Group AG is a multinational Investment banking, investment bank and financial services company founded and based in Switzerland. Co-headquartered in the cities of Zürich and Basel, it maintains a presence in all major financial centres ...
and Julius Bär. Credit Suisse partnered with
First Boston : ''For the company after its acquisition by Credit Suisse, see Credit Suisse First Boston (known as CSFB and CS First Boston)'' The First Boston Corporation was a New York-based bulge bracket investment bank, founded in 1932 and acquired by Credi ...
in 1978 before buying a controlling share of the bank in 1988. From 1990 to 2000, the company purchased institutions such as
Winterthur Group Axa Winterthur is a multinational insurance company. The original company named Winterthur was founded in Winterthur, Switzerland, in 1875. From 1997 to June 2006, Winterthur was a Credit Suisse (CS) subsidiary. Now, Paris-based Axa Insurance has e ...
, Swiss Volksbank, Swiss American Securities Inc. (SASI), and Bank Leu. The biggest institutional shareholders of Credit Suisse include the
Qatar Investment Authority The Qatar Investment Authority (QIA; ar, جهاز قطر للإستثمار) is Qatar's sovereign wealth fund. The QIA was founded by the State of Qatar in 2005 to strengthen the country's economy by diversifying into new asset classes. In 2021 ...
and
BlackRock BlackRock, Inc. is an American Multinational corporation, multi-national investment company based in New York City. Founded in 1988, initially as a Enterprise risk management, risk management and fixed income institutional asset manager, BlackR ...
(about 5% each), the US mutual fund providers Harris Associates (the largest shareholder as of August 2022, with 10.1%) and Dodge & Cox, the central bank of Norway and the Saudi Arabian Olayan Group. 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 which culminated in a guilty plea and the forfeiture of US$2.6 billion in fines from 2008 to 2012. In 2021, Credit Suisse had assets under management (AuM) of over CHF 1.6 trillion.


Corporate structure

Credit Suisse Group AG, is organised as a
joint-stock company A joint-stock company is a business entity in which shares of the company's capital stock, stock can be bought and sold by shareholders. Each shareholder owns company stock in proportion, evidenced by their share (finance), shares (certificates ...
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. It also has the authority to create committees that delegate specific management functions. Credit Suisse has two divisions,
Private Banking Private banking is banking, investment and other financial services provided by banks and financial institutions primarily serving high-net-worth individuals (HNWIs)—defined as those with very high levels of income or sizable assets. A bank that ...
&
Wealth Management Wealth management (WM) or wealth management advisory (WMA) is an investment advisory service that provides financial management and wealth advisory services to a wide array of clients ranging from Wealth, affluent to High-net-worth individual, hig ...
and
Investment Banking Investment banking pertains to certain activities of a financial services company or a Corporate structure, corporate division that consist in advisory-based financial transactions on behalf of individuals, corporations, and governments. Tradition ...
. A
Shared Services Shared services is the provision of a service by one part of an organization or group, where that service had previously been found, in more than one part of the organization or group. Thus the funding and resourcing of the service is shared and th ...
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 Prime brokerage is the generic name for a bundled package of services offered by investment banks, Wealth management, wealth management firms, and Security (finance), securities dealers to hedge funds which need the ability to borrow securities a ...
, and capital procurement. Credit Suisse Asset Management sells investment classes, alternative investments, real-estate, equities, fixed income products, and other financial products.


Ownership

In August 2022, it was revealed that the first shareholder of Credit Suisse is in fact American, namely Harris Associates, holding over 10% of the shares of the group. Harris Associates itself is owned by French bank
Natixis Natixis is a French corporate and investment bank created in November 2006 from the merger of the asset management and investment banking operations of ''Natexis Banques Populaires'' (Banque Populaire group) and ''IXIS'' (Groupe Caisse d'Epargne ...
.


History


Early history

Credit Suisse's founder,
Alfred Escher Johann Heinrich Alfred Escher vom Glas, known as Alfred Escher (20 February 1819 – 6 December 1882) was a Swiss Swiss may refer to: * the adjectival form of Switzerland *Swiss people Places *Swiss, Missouri *Swiss, North Carolina *Swiss, We ...
, was called "the spiritual father of the railway law of 1852", for his work defeating the idea of a state-run railway system in Switzerland in favor of privatization. Escher founded Credit Suisse (originally called the Swiss Credit Institution, i.e., ''Schweizerische Kreditanstalt'') jointly with Allgemeine Deutsche Credit-Anstalt in 1856 primarily to provide domestic funding to railway projects, avoiding French banks that wanted to exert influence over the railway system. Escher aimed to start the company with three million shares and instead sold 218 million shares in three days. The bank 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. 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. Credit Suisse played a substantial role in the economic development of Switzerland, helping the country develop its currency system, funding entrepreneurs and investing in the
Gotthard railway The Gotthard railway (german: Gotthardbahn; it, Ferrovia del Gottardo) is the Switzerland, Swiss trans-alpine railway line from northern Switzerland to the Ticino, canton of Ticino. The line forms a major part of an important international rail ...
, which connected Switzerland to the European rail system in 1882. 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. 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." The bank also helped fund the effort to disarm and imprison French troops that crossed into Swiss borders in the 1870 Franco-Prussian War. By the end of the war, Credit Suisse had become the largest bank in Switzerland. Throughout the late 1800s, 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 1886, due to losses in agriculture, venture investments, commodities, and international trade. The bank created its own sugar beet factory, bought 25,000 shares in animal breeding ventures and supported an export business, Schweizerische Exportgesellschaft, that experienced heavy losses for over-speculative investing. In the early 1900s Credit Suisse began catering to consumers and the middle-class with deposit counters, currency exchanges and savings accounts. The first branch outside of Zürich was opened in 1905 in
Basel Basel ( , ), also known as Basle ( ),french: Bâle ; it, Basilea ; rm, label=Sutsilvan, Basileia; other rm, Basilea . is a city in northwestern Switzerland on the river High Rhine, Rhine. Basel is Switzerland's List of cities in Switzerland, th ...
. The bank helped companies affected by World War I restructuring, and extended loans for reconstruction efforts. During the 1920s depression, net profits and dividends were halved and employees took salary cuts. After World War II, a substantial portion of Credit Suisse's business was in foreign reconstruction efforts. Banks subsequently acquired by Credit Suisse have been linked to bank accounts used by members of the
NSDAP The Nazi Party, officially the National Socialist German Workers' Party (german: Nationalsozialistische Deutsche Arbeiterpartei or NSDAP), was a far-right politics, far-right political party in Germany active between 1920 and 1945 that crea ...
in the 1930s. Holocaust survivors had problems trying to retrieve assets from relatives that died in concentration camps without death certificates. This led to a class action lawsuit in 1996 that settled in 2000 for $1.25 billion. The ''Agreement on the Swiss Banks' Code of Conduct with Regard to the Exercise of Due Diligence'' was created in the 1970s, after a Credit Suisse branch in
Chiasso Chiasso (; lmo, Ciass ) is a Municipalities of Switzerland, municipality in the district of Mendrisio (district), Mendrisio in the Cantons of Switzerland, canton of Ticino in Switzerland. As Extreme points of Switzerland, the southernmost of Swi ...
was exposed for illegally funneling $900 million in Italian deposits to speculative investments.


Acquisitions, growth and First Boston

In 1978, White, Weld & Company dropped its partnership with Credit Suisse after it was bought by
Merrill Lynch Merrill (officially Merrill Lynch, Pierce, Fenner & Smith Incorporated), previously branded Merrill Lynch, is an American investment management and wealth management division of Bank of America. Along with BofA Securities, the investment banki ...
. To replace the partnership with White, Credit Suisse partnered with
First Boston : ''For the company after its acquisition by Credit Suisse, see Credit Suisse First Boston (known as CSFB and CS First Boston)'' The First Boston Corporation was a New York-based bulge bracket investment bank, founded in 1932 and acquired by Credi ...
to create
Credit Suisse First Boston Credit Suisse First Boston (also known as CSFB and CS First Boston) is the investment banking affiliate of Credit Suisse headquartered in New York. The company was created by the merger of First Boston, First Boston Corporation and Credit Suisse, ...
in Europe and bought a 44 percent stake in First Boston's US operations. In 1987, the Group acquired the blue chip London stockbrokers Buckmaster & Moore. Originally established by Irish aristocrat Charles Armytage-Moore and sportsman Walter Buckmaster, who had met at
Repton School Repton School is a 13–18 co-educational Mixed-sex education, also known as mixed-gender education, co-education, or coeducation (abbreviated to co-ed or coed), is a system of education where males and females are educated together. Where ...
. As stockbrokers they were very well connected, had developed a good private client business, which at one time included
John Maynard Keynes John Maynard Keynes, 1st Baron Keynes, ( ; 5 June 1883 – 21 April 1946), was an English economist whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments. Originally trained in m ...
. Other Credit Suisse First Boston brands were later created in Switzerland, Asia, London, New York and Tokyo. According to an article in ''
The New York Times ''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid d ...
'', First Boston became "the superstar of the Euromarkets" by buying stakes in American companies that wanted to issue bonds. In 1988 First Boston loaned $487 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 $475 million in
junk bonds In finance, a high-yield bond (non-investment-grade bond, speculative-grade bond, or junk bond) is a Bond (finance), bond that is rated below investment grade by credit rating agencies. These bonds have a higher risk of default (finance), defau ...
. When the junk bonds market crashed the following year, Gibbons couldn't repay First Boston. Credit Suisse injected $725 million to keep First Boston in business, which ultimately led to the company being taken over by Credit Suisse. This became known as the "burning bed" deal, because the
Federal Reserve The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a ...
overlooked the Glass–Steagall Act that requires separation between commercial and investment banks in order to preserve the stability of the financial markets. In the late 1990s, Credit Suisse executed an aggressive acquisition strategy. The bank acquired Bank Leu, known as Switzerland's oldest bank, in 1990. In 1993 Credit Suisse outbid UBS for a controlling stake in Switzerland's fifth largest bank, Swiss Volksbank in a $1.1 billion deal. It also merged with
Winterthur Group Axa Winterthur is a multinational insurance company. The original company named Winterthur was founded in Winterthur, Switzerland, in 1875. From 1997 to June 2006, Winterthur was a Credit Suisse (CS) subsidiary. Now, Paris-based Axa Insurance has e ...
in 1997 for about $9 billion and acquired the asset management division of Warburg, Pincus & Co. in 1999 for $650 million. Donaldson, Lufkin & Jenrette was purchased for $11.5 billion in 2000. In 1996, 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 $800 million and result in 7,000 lost jobs, but save $560 million a year. While Credit Suisse First Boston had been struggling, Credit Suisse's overall profits had grown 20 percent over the prior year, reaching $664 million. In 1999 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. In the 2000s, Credit Suisse executed a series of restructures. In 2002 the bank was consolidated into two entities: Credit Suisse First Boston for investments and Credit Suisse Financial Services. A third unit was added in 2004 for insurance. Credit Suisse restructured again in 2004 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. 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. In 2006, Credit Suisse acknowledged misconduct for helping Iran and other countries hide transactions from US authorities and paid a $536 million settlement. 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. 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 2007 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. In 2009,
Yellowstone Club The Yellowstone Club is a private residential club, ski resort, and golf resort located in Madison County, Montana, Madison County, just west of Big Sky, Montana. It is rated among the top 10 lifestyle estates in the world. History Real estate d ...
founder Tim Blixseth sued Credit Suisse when the bank attempted to collect on $286 million in loan debt during Yellowstone's bankruptcy proceedings. The debtor had borrowed more than $300 million for the business, but used a large portion of it for personal use before eventually filing for bankruptcy. 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.


Post-financial crisis

According to ''
The Wall Street Journal ''The Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its The Wall Street Journal Asia, ...
'' in 2008, "Credit Suisse survived the credit crisis better than many competitors." Credit Suisse had $902 million in writedowns for subprime holdings and the same amount for leveraged loans, but it did not have to borrow from the government. Along with other banks, Credit Suisse was investigated and sued by US authorities in 2012 for bundling mortgage loans with securities, misrepresenting the risks of underlying mortgages during the housing boom. Following the crisis, Credit Suisse cut more than one-trillion in assets and made plans to cut its investment banking arm 37 percent by 2014. It reduced emphasis on investment banking and focused on
private banking Private banking is banking, investment and other financial services provided by banks and financial institutions primarily serving high-net-worth individuals (HNWIs)—defined as those with very high levels of income or sizable assets. A bank that ...
and
wealth management Wealth management (WM) or wealth management advisory (WMA) is an investment advisory service that provides financial management and wealth advisory services to a wide array of clients ranging from Wealth, affluent to High-net-worth individual, hig ...
. In July 2011, Credit Suisse cut 2,000 jobs in response to a weaker than expected economic recovery and later merged its asset management with the private bank group to cut additional costs. A series of international investigations took place in the early 2000s regarding the use banking secrecy in Credit Suisse accounts for tax evasion. In 2008, the Brazilian government investigated 13 former and current Credit Suisse employees. The investigation led to arrests that year and in 2009 as part of a larger crackdown in Brazil. Four Credit Suisse bankers were accused of fraud by the
US Justice Department The United States Department of Justice (DOJ), also known as the Justice Department, is a United States federal executive departments, federal executive department of the United States government tasked with the enforcement of federal law and a ...
in 2011 for helping wealthy Americans avoid taxes. In 2012, German authorities found that citizens were using insurance policies of a Bermuda-based Credit Suisse subsidiary to earn tax-free interest. In November 2012, Credit Suisse's asset management division was merged with the private banking arm. In September 2012, the Swiss government gave banks like Credit Suisse permission to provide information to the US Justice Department for tax evasion probes. In February 2014 it agreed to pay a fine of $197 million after one of its businesses served 8,500 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. Separately, in 2013, German authorities began to probe Credit Suisse, its
private bank Private banks are banks owned by either the individual or a general Partner (business rank), partner(s) with limited partner(s). Private banks are not incorporation (business), incorporated. In any such case, creditors can look to both the "enti ...
subsidiary
Clariden Leu Clariden Leu was a Swiss private bank based in Zurich and Geneva Switzerland founded in 2007 by Clariden president Alex Hoffmann and Credit Suisse Group. Until 2007 it was operating as Clariden Bank an independent Private Bank belonging both to ...
, and its regional subsidiary Neue Aargauer Bank for helping German citizens evade taxes. In 2012, the bank eventually entered into a €150 million settlement with the government. In March 2014, 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. In May 2014, 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 Drexel Burnham Lambert was an American multinational investment banking, investment bank that was forced into bankruptcy in 1990 due to its involvement in illegal activities in the junk bond market, driven by senior executive Michael Milken. At ...
in 1989 and the largest to do so since the
Bankers Trust Bankers Trust was a historic American banking A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the ...
in 1999. "Credit Suisse conspired to help U.S. 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. 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 $2.6 billion penalty was announced. In March 2015, it was announced that Tidjane Thiam, the CEO of Prudential would leave to become the next CEO of Credit Suisse. In September 2016, 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). As of 2018, share prices of Credit Suisse and other Swiss banks including UBS remained mostly stagnant or flat since the 2008 financial crisis. This is seen as a result of the aftermath of the collapse of
Lehman Brothers Lehman Brothers Holdings Inc. ( ) was an American global financial services firm founded in 1847. Before Bankruptcy of Lehman Brothers, filing for bankruptcy in 2008, Lehman was the fourth-largest investment bank in the United States (behind Gol ...
, 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 2008, which have not recovered to pre-
financial crisis A financial crisis is any of a broad variety of situations in which some financial assets suddenly lose a large part of their nominal value. In the 19th and early 20th centuries, many financial crises were associated with Bank run#Systemic bankin ...
levels. In August 2019, 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 Fintech, a portmanteau of "financial technology", refers to firms using new technology to compete with traditional financial methods in the delivery of financial services Financial services are the Service (economics), economic services prov ...
competitors such as
N26 N26 (known as ''Number 26'' until July 2016) is a German neobank A neobank (also known as an online bank, internet-only bank, virtual bank or digital bank) is a type of direct bank that operates exclusively online without traditional physical ...
or
Revolut Revolut is a British financial technology company that offers banking services, but did not have a UK banking licence. Headquartered in London, it was founded in 2015 by Nikolay Storonsky and Vlad Yatsenko. It offers accounts featuring Foreign e ...
in Switzerland and shall help to better attract young clients. In July 2020, Thomas Gottstein, the new CEO of the company, announced restructuring; it was influenced as a result of the trading surge in Q2 of 2020, amid the
COVID-19 pandemic The COVID-19 pandemic, also known as the coronavirus pandemic, is an ongoing global pandemic of coronavirus disease 2019 (COVID-19) caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The novel virus was first identif ...
. 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."


Financial products

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 50,000 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 2002 about 20 percent of Credit Suisse's revenue was from its insurance business it gained through the 1997 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 Long/short equity is an investment strategy generally associated with hedge funds. It involves buying equities that are expected to increase in value and selling short equities that are expected to decrease in value. This is different from the ri ...
index (originally called Credit Suisse/Tremont Hedge Fund Indexes). According to a 2011 article in SeekingAlpha, Credit Suisse's investment managers favor financial, technology and energy sector stocks. The bank's head of equity investments in
Europe Europe is a large peninsula conventionally considered a continent in its own right because of its great physical size and the weight of its history and traditions. Europe is also considered a Continent#Subcontinents, subcontinent of Eurasia ...
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 Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its The Wall Street Journal Asia, ...
'', 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 100. Credit Suisse publishes its investment advice in four publications: ''Compass, Viewpoints, Research'' and the ''Credit Suisse Investment Committee Report''.


Reputation and rankings

The reputation of the bank is controversial. From the 1940s until into the 2010s, 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. As of 2012, Credit Suisse was a member of
Wall Street Wall Street is an eight-block-long street in the Financial District, Manhattan, Financial District of Lower Manhattan in New York City. It runs between Broadway (Manhattan), Broadway in the west to South Street (Manhattan), South Street and ...
's bulge bracket, a list of nine 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 ''Fortune'' is an American multinational corporation, multinational business magazine headquartered in New York City. It is published by Fortune Media Group Holdings, owned by Thai businessman Chatchaval Jiaravanon. The publication was founded b ...
's'' most admired companies. As of 2004, Credit Suisse was first in volume of high-yield transactions, second for corporate high-yield bond insurance and third for IPO underwriting. As of 2012, Credit Suisse was recognised as the world's best private bank by ''
Euromoney ''Euromoney'' is an English-language monthly magazine focused on business and finance. First published in 1969, it is the flagship production of Euromoney Institutional Investor plc. History and profile ''Euromoney'' was first published in 19 ...
'' 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. in 1995, 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. Credit Suisse was recognized by the Asset Triple A Awards and in 2005 it was ranked as the second best prime broker by ''
Institutional Investor An institutional investor is an entity which pools money to purchase Security (finance), securities, real property, and other investment assets or originate loans. Institutional investors include commercial banks, central banks, credit unions, ...
''.


Controversies


Mismarking, 2007

In 2007, two Credit Suisse traders pleaded guilty to
mismarking Mismarking in securities valuation takes place when the value that is assigned to securities does not reflect what the securities are actually worth, due to intentional fraudulent mispricing. Mismarking misleads investors and fund executives abou ...
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 The U.S. Securities and Exchange Commission (SEC) is an independent agencies of the United States government, independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary pu ...
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 ''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid d ...
'' called "a brazen scheme to artificially increase the price of
bond Bond or bonds may refer to: Common meanings * Bond (finance), a type of debt security * Bail bond, a commercial third-party guarantor of surety bonds in the United States * Chemical bond, the attraction of atoms, ions or molecules to form chemical ...
s 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 desk Trade involves the transfer of goods and services from one person or entity to another, often in exchange for money. Economists refer to a system A system is a group of interacting or interrelated elements that act according to a set of ...
s.Joe McGrath (2020)
"Why Do Good People Do Bad Things? A Multi-Level Analysis of Individual, Organizational, and Structural Causes of White-Collar Crime,"
''Seattle University Law Review''.
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 $2.65 billion write-down after discovering their traders' mismarking.


International Emergency Economic Powers Act and New York State Law violations, 2009

On 16 December 2009, it was announced that the U.S. Dept. of Justice reached a settlement with Credit Suisse over accusations that the bank assisted residents of
International Emergency Economic Powers Act The International Emergency Economic Powers Act (IEEPA), Title II of , is a United States federal law The law of the United States comprises many levels of Codification (law), codified and uncodified forms of law, of which the most important ...
sanctioned countries to wire money in violation of the Act as well as New York law from 1995 to 2006. The settlement resulted in Credit Suisse forfeiting $536 million.


Forex manipulation, 2013

In 2013, Credit Suisse was fined €83.3 million for forex rates manipulation by the European Union Commission on Competition because of its participation in a
cartel A cartel is a group of independent market participants who Collusion, collude with each other in order to improve their profits and dominate the market. Cartels are usually associations in the same sphere of business, and thus an alliance of ...
detrimental to E.U. consumers and involving several other large international banks.


U.S. tax fraud conspiracy, 2014

In 2014, Credit Suisse pleaded guilty to conspiring with Americans to file false tax returns. Credit Suisse subsequently paid $2.6 billion in fines and restitution.


Malaysia Development Berhad scandal, 2015

In September 2015 Hong Kong police began investigations regarding $250 million in Credit Suisse branch deposits in Hong Kong linked to former
Malaysia Malaysia ( ; ) is a country in Southeast Asia. The federation, federal constitutional monarchy consists of States and federal territories of Malaysia, thirteen states and three federal territories, separated by the South China Sea into two r ...
's Prime Minister
Najib Razak Malay styles and titles#Dato' Sri, Dato' Sri Hajj, Haji Mohammad Najib bin Tun Haji Abdul Razak ( ms, محمد نجيب بن عبد الرزاق, label=Jawi alphabet, Jawi, script=arab, italic=unset, ; born 23 July 1953) is a Malaysian peop ...
and Malaysian sovereign wealth fund,
1Malaysia Development Berhad 1Malaysia Development Berhad (1MDB; ) is an insolvent In accounting, insolvency is the state of being unable to pay the debts, by a Natural person, person or company (debtor), at Maturity (finance), maturity; those in a state of insolvenc ...
(1MDB). In 2017, Singapore fined Credit Suisse a total of S$0.7m (£0.4m, $0.5m, €0.45m). In May 2017, Reuters reported that "Swiss financial watchdog FINMA ... had conducted "extensive investigations" into Credit Suisse's dealings surrounding 1MDB". In 2019 FINMA issued a complaint to Credit Suisse.


Mozambique secret loans scandal, 2017

Between 2012 and 2016, Credit Suisse brokered US$1.3 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 The International Monetary Fund (IMF) is a major financial agency of the United Nations The United Nations (UN) is an intergovernmental organization whose stated purposes are to maintain international peace and international security, ...
and the banks issuing the loans, including Credit Suisse. Credit Suisse was fined almost US$500 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 2021, Credit Suisse pled guilty to wire fraud and agreed to forgive US$200 million in debt owed by Mozambique to the bank.


US Foreign Corrupt Practices Act violation, 2018

On 5 July 2018, Credit Suisse agreed to pay a $47 million fine to the
US Department of Justice The United States Department of Justice (DOJ), also known as the Justice Department, is a federal executive department of the United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) o ...
and $30 million to resolve charges of the US Securities and Exchange Commission (SEC). The SEC's investigation said that the banking group sought banking-investment business in the
Asia-Pacific Asia-Pacific (APAC) is the part of the world near the western Pacific Ocean. The Asia-Pacific region varies in area depending on the context, but it often includes countries in East Asia, Southeast Asia, and Oceania that border the Pacific ...
region by hiring and promoting more than one hundred Chinese officials and related people in violation of the
Foreign Corrupt Practices Act The Foreign Corrupt Practices Act of 1977 (FCPA) (, ''et seq.'') is a United States federal law that prohibits U.S. citizens and entities from Bribery, bribing foreign government officials to benefit their business interests. The FCPA is applica ...
.


Climate controversy, 2018

In November 2018, about a dozen climate activists played tennis inside Credit Suisse agencies (of
Lausanne Lausanne ( , , , ) ; it, Losanna; rm, Losanna. is the capital and largest city of the Swiss French speaking canton of Vaud. It is a hilly city situated on the shores of Lake Geneva, about halfway between the Jura Mountains and the Alps, and fac ...
,
Geneva Geneva ( ; french: Genève ) frp, Genèva ; german: link=no, Genf ; it, Ginevra ; rm, Genevra is the List of cities in Switzerland, second-most populous city in Switzerland (after Zürich) and the most populous city of Romandy, the French-speaki ...
and
Basel Basel ( , ), also known as Basle ( ),french: Bâle ; it, Basilea ; rm, label=Sutsilvan, Basileia; other rm, Basilea . is a city in northwestern Switzerland on the river High Rhine, Rhine. Basel is Switzerland's List of cities in Switzerland, th ...
simultaneously), disrupting operations as a protest against the bank's investments in
fossil fuel A fossil fuel is a hydrocarbon-containing material formed naturally in the Earth's crust from the remains of dead plants and animals that is extracted and combustion, burned as a fuel. The main fossil fuels are coal, petroleum, oil, and natura ...
s. Credit Suisse lodged a complaint and the activists from Lausanne were tried in January 2020 and fined 21,600 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 Roger Federer (; born 8 August 1981) is a Swiss former professional tennis player. He was ranked List of ATP number 1 ranked singles tennis players#Weeks at No. 1, world No. 1 by the Association of Tennis Professionals (ATP) for 310 weeks, in ...
to break his connection with Credit Suisse as a sponsor due to the company's participating in the
climate crisis ''Climate crisis'' is a term describing global warming and climate change, and their Effects of climate change, impacts. The term and the alternative term ''climate emergency'' have been used to describe the threat of global warming to humanity (a ...
(notably by multiplying 16-fold its financing for
coal Coal is a combustible black or brownish-black sedimentary rock, formed as stratum, rock strata called coal seams. Coal is mostly carbon with variable amounts of other Chemical element, elements, chiefly hydrogen, sulfur, oxygen, and nitrogen ...
from 2016 to 2017). On 11 January 2020, 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 2020, 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.


Espionage scandal, 2019

In 2019, a senior executive who was leaving the firm discovered that Pierre-Olivier Bouée, the
chief operating officer A chief operating officer or chief operations officer, also called a COO, is one of the highest-ranking executive positions in an organization, composing part of the " C-suite". The COO is usually the second-in-command at the firm, especially if ...
(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 "killed" himself.


Greensill Capital, 2021

In March 2021, Credit Suisse closed and liquidated several supply-chain
investment fund An investment fund is a way of investing money alongside other investors in order to benefit from the inherent advantages of working as part of a group such as reducing the risks of the investment by a significant percentage. These advantages in ...
s 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 2021. Credit Suisse has returned around $5.9 billion to investors in its Greensill-linked funds.


Archegos Capital, 2021

In April 2021, at least seven executives were removed from their posts after Credit Suisse reported losses of $4.7 billion linked to its
prime brokerage Prime brokerage is the generic name for a bundled package of services offered by investment banks, Wealth management, wealth management firms, and Security (finance), securities dealers to hedge funds which need the ability to borrow securities a ...
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 2021 Annual General Meeting, Andreas Gottschling, head of the board's risk committee, also stood down.


Drug money laundering scandal, 2022

On 7 February 2022, it was announced that Credit Suisse would be tried in the first
criminal trial Criminal procedure is the adjudication process of the criminal law. While criminal procedure differs dramatically by jurisdiction, the process generally begins with a formal criminal charge with the person on trial either being free on bail or i ...
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 2004 and 2008. On 27 June 2022, the bank as well as one of its former employees was found guilty by the
Federal Criminal Court of Switzerland french: Tribunal pénal féderal it, Tribunale penale federale rm, Tribunal penal federal , image = Bundesstrafgericht logo.svg , imagesize = , caption = , motto = , established = , country = ...
for not doing enough to prevent the crime from taking place. The court imposed a fine of and ordered the confiscation of assets worth more than that the drug gang held in accounts at the bank; and to relinquish over — 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, 2022

In February 2022, details of 30,000 customers holding over 100bn Swiss francs (£80bn) in accounts at the bank were leaked to the ''
Süddeutsche Zeitung The ''Süddeutsche Zeitung'' (; ), published in Munich Munich ( ; german: München ; bar, Minga ) is the capital and most populous city of the States of Germany, German state of Bavaria. With a population of 1,558,395 inhabitants as o ...
'', and became known as "
Suisse secrets Suisse secrets was a February 2022 leak of details of more than Swiss franc, CHF 100 billion (roughly US$108.5bn, €95.5bn or £80bn) held in Street name securities, nominee accounts linked to over 30,000 clients of Credit Suisse, the largest e ...
". Among those with accounts at the bank were a human trafficker, a torturer, drug traffickers and a Vatican-run account that allegedly invested €350m 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, 2022

Following Swiss sanctions on Russia during the
2022 Russian invasion of Ukraine On 24 February 2022, in a major escalation of the Russo-Ukrainian War, which began in 2014. The invasion has likely resulted in tens of thousands of deaths on both sides. It has caused Europe's List of largest refugee crises, largest refug ...
, 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, 2022

In early October 2022, Credit Suisse stocks came under considerable pressure when rumours on
social media Social media are interactive media technologies that facilitate the Content creation, creation and information sharing, sharing of information, ideas, interests, and other forms of expression through virtual communities and Network virtualization, ...
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 The Swiss National Bank (SNB; german: Schweizerische Nationalbank; french: Banque nationale suisse; it, Banca nazionale svizzera; rm, Banca naziunala svizra) is the central bank of Switzerland, responsible for the nation's monetary policy an ...
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 2021 from the Archegos and Greensill financial scandals that implicated former Archegos executives with racketeering conspiracy, securities fraud and wire fraud. On 7 October 2022, the bank offered to buy back USD 3 billion worth of debt, and put Zurich's Savoy Hotel on sale. The bank's current chairman, Axel Lehmann, also assured investors that the bank was stable after wealthy clients begun moving their assets out of the bank.


Work environment

Credit Suisse is more internationally minded than most European banks. 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 60- to 110-hour work-weeks. 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 80- to 100-hour work-weeks.


See also

* Banco Garantia * European Financial Services Roundtable * First Boston Corporation * World Jewish Congress lawsuit against Swiss banks, 1995


References


External links

* * {{DEFAULTSORT:Credit suisse Companies based in Zürich Banks established in 1856 Financial services companies established in 1856 1856 establishments in Switzerland Holding companies established in 1856 Companies listed on the New York Stock Exchange Banks based in Zürich Systemically important financial institutions Primary dealers Companies formerly listed on the Tokyo Stock Exchange Companies listed on the SIX Swiss Exchange Holding companies of Switzerland Multinational companies headquartered in Switzerland Swiss brands Investment management companies of Switzerland Corporate scandals