How a run of bad news took a 167-year-old institution known for Swiss stability to the brink. Here’s a look at a history of crises at Credit Suisse.

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Credit Suisse, one of the leading financial institutions in the world, is currently facing a major crisis that has shaken the financial markets. The Swiss bank has been under immense scrutiny and pressure from regulators, investors, and the public after a series of scandals and mishaps that have damaged its reputation and financial stability.

The most recent crisis for Credit Suisse began with the collapse of Archegos Capital Management, a family office fund that was heavily leveraged and had many large positions in various stocks. When Archegos defaulted on its margin calls, Credit Suisse was one of the major banks that suffered significant losses. The bank had to liquidate billions of dollars worth of stocks, leading to a loss of $5.5 billion for the first quarter of 2021.

This loss was a major blow to Credit Suisse, as it eroded its capital and raised concerns about the bank’s risk management and oversight of its clients. It also raised questions about the bank’s due diligence processes and the extent of its exposure to risky, highly leveraged clients.

The Archegos debacle came shortly after another major scandal for Credit Suisse involving its exposure to Greensill Capital, a supply chain finance company that filed for insolvency in March 2021. Credit Suisse had invested in funds linked to Greensill, which ultimately ended in significant losses for the bank and its clients.

These back-to-back crises have severely damaged Credit Suisse’s reputation and raised concerns about the bank’s risk management and control practices. The bank has also faced backlash from its investors, who have seen their investments tank as a result of its mismanagement.

In response to the crises, Credit Suisse has announced a series of measures to address the issues and restore confidence in the bank. These include a review of its risk management processes, a reduction in its risk appetite, and the departure of several senior executives, including its chief risk officer.

The bank has also faced scrutiny from regulators, with the Swiss financial regulator FINMA launching an investigation into Credit Suisse’s risk management practices and its handling of the Archegos and Greensill crises.

The crises at Credit Suisse have had far-reaching implications, not only for the bank itself but also for the wider financial industry. They have highlighted the risks of excessive leverage and the potential for major losses when dealing with highly leveraged clients. They have also raised questions about the effectiveness of risk management practices at major financial institutions and the need for more stringent oversight by regulators.

As Credit Suisse works to address the fallout from its recent crises and regain the trust of its clients and investors, the financial industry will be closely watching to see how the bank navigates its way out of this challenging period. The scandals have raised important questions about risk management and oversight in the banking sector, and it is crucial for Credit Suisse and other financial institutions to learn from these mistakes and implement changes to prevent similar crises in the future.