Introduction
In the recent investigation into the collapse of financing company Greensill Resources, Swiss authorities conducted a raid on the offices of Credit Suisse Group AG. This event has raised questions about the involvement of the renowned law firm Star and its impact on Greensill Bank’s failure. In this article, we will delve into the details of the investigation and shed light on the actions taken by Credit Suisse.
Credit Suisse’s Cooperation with Authorities
According to Credit Suisse, the bank is fully cooperating with the authorities in the investigation. While the raid was not specifically directed against Credit Suisse, they have provided the necessary support to the authorities. It is crucial to note that Credit Suisse has emphasized its commitment to transparency and cooperation throughout this process.
The Investigation and Allegations
Swiss newspaper NZZ am Sonntag reported that the raid on Credit Suisse’s offices was part of an investigation by Zurich’s public prosecutor into Greensill. The investigation involves allegations of unfair competition violations in connection with Greensill. The financial affairs division of Switzerland also filed a criminal complaint related to these allegations. At this stage, the Zurich public prosecutor and economic affairs division have not provided any additional information.
Greensill’s Bankruptcy and Credit Suisse’s Involvement
Following Greensill’s collapse in March, Credit Suisse faced significant losses. The bank had invested $10 billion in investment funds that supported Greensill’s supply-chain finance lending programs. However, Credit Suisse has managed to recover approximately $7 billion of the total investment so far.
It is essential to highlight that Credit Suisse’s asset management arm had been purchasing supply-chain finance loans from Greensill for several years. These loans were then placed in mutual funds marketed as secure investments. However, it was later revealed that some of the loans provided by Greensill were made to high-risk borrowers and were not part of traditional supply-chain financing.
Regulatory Actions and Risk Management
Finma, Switzerland’s leading financial regulatory authority, is currently conducting a civil enforcement case against Credit Suisse regarding its handling of Greensill. This case focuses on the bank’s risk management practices and its investment in Greensill’s financial products. To avoid similar incidents in the future, Credit Suisse has taken significant steps to enhance its risk management framework.
During an investor conference, Credit Suisse Chairman António Horta-Osório highlighted the progress made in improving risk management since his appointment in April. The bank has implemented new measures and restructured its risk management processes. Additionally, two new board members, Axel Lehmann and Juan Colombas, renowned for their expertise in risk management, have been appointed to further strengthen the bank’s risk management capabilities.
Conclusion
The investigation into the collapse of Greensill Resources has shed light on the role played by Credit Suisse and the star law firm in this unfortunate event. As the investigation progresses, Credit Suisse continues to cooperate fully with the authorities. It remains committed to addressing the concerns raised and ensuring enhanced risk management practices in the future.
