Credit Suisse is one of the 30 systemically important banks in the world with a century-old history.

(Reuters)

[Financial Channel/Comprehensive Report] Founded in 1856, Credit Suisse provided funds for Swiss railway construction and played a key role in Switzerland’s economic development. After being injured by the subprime mortgage storm in 2007, it introduced funds from the Middle East.

Then a series of scandals broke out, including violating the U.S. embargo on Iran and being fined 536 million U.S. dollars, and paying the U.S. 2.6 billion U.S. dollars for tax evasion in exchange for not prosecuting. It was also involved in corruption cases in the African country Mozambique and multiple money laundering cases.

In the hedge fund Archegos decapitation event in 2021, Credit Suisse lost as much as US$5.5 billion. These bad debts did not cause Credit Suisse to collapse. Instead, it was recently affected by the Silicon Valley Bank storm. The largest shareholder of Credit Suisse, who holds 9.88% of the shares, is Shaw The local National Bank refused to inject capital, and the major shareholder instantly became the "underworld" of Credit Suisse's acquisition.

Credit Suisse, the second largest bank in Switzerland with a history of 166 years, merged with UBS on March 19, 2023, and finally became a historical term.

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U.S. fines Switzerland for series of scandals

How did Credit Suisse head towards destruction?

The Swiss media "Le Temps" unceremoniously made a chronology of Credit Suisse's fall into hell.

According to the data, Credit Suisse, founded in 1856, has a place in the economic development of Switzerland, especially in providing funds for the construction of Swiss railways.

The first time Credit Suisse had problems was when it was injured in the subprime mortgage crisis in 2007. At that time, Credit Suisse estimated its losses at about 10 billion Swiss francs, which was lower than UBS's 40 billion Swiss francs.

However, in order to have sufficient capital, Credit Suisse introduced funds from the Middle East for recapitalization.

With new funds, it was unable to escape past misdeeds. In 2009, Credit Suisse was accused by the United States of violating U.S. sanctions against Iran and Sudan from 1995 to 2006, and was fined US$536 million by the United States.

In 2014, Credit Suisse was caught involved in tax evasion and paid US$2.6 billion to the US authorities in exchange for a non-prosecution agreement.

In 2016, he was involved in a corruption case in Mozambique, an African country, and a spy scandal involving former employees and high-level officials.

The bank's employees are accused of providing $2 billion worth of undercover loans to Mozambican officials.

In 2018, Swiss regulator Finma accused Credit Suisse of being involved in money laundering.

In December 2020, the Swiss Federal Prosecutor's Office accused Credit Suisse of being involved in money laundering and drug trafficking in Bulgaria. Although the fine amount was not large, only 2 million Swiss francs, it once again damaged the reputation of Credit Suisse.

Credit Suisse seriously injured in Archegos beheading incident

Most notably, Credit Suisse raised financing funds for British financial services firm Greensill Capital, which it sold to insurance companies, pension funds and thousands of private banking clients.

Unexpectedly, Greensill Capital collapsed in 2021, and Credit Suisse suffered a major loss of US$10 billion, and related investigations and lawsuits are in progress.

In the same year, in the 2021 hedge fund Archegos decapitation incident, Credit Suisse lost as much as US$5.5 billion and began to truly fall into hell.

In 2022, there are rumors in the market that Credit Suisse is on the verge of bankruptcy. The bank tried to eliminate the crisis, but customers withdrew their funds and retreated.

In order to stabilize the morale of the army, Ulrich Körner, CEO of Credit Suisse, announced a major reorganization, slashed investment banking operations, and introduced a new shareholder, the National Bank of Saudi Arabia. A few weeks later, the National Bank of Saudi Arabia held 9.88% of the shares and became Credit Suisse. largest shareholder.

Major shareholders refuse capital injection, market confidence collapses

In March of this year, Silicon Valley Bank in the United States collapsed, and the global banking industry fell into turmoil. Credit Suisse was named in a bad situation. However, the president of the National Bank of Saudi Arabia did not intend to further support Credit Suisse financially, which ignited the gunpowder.

Credit Suisse's stock price plummeted on March 15, and the Swiss National Bank came to the rescue. The market sentiment eased slightly, and investor confidence still could not be restored. Finally, it proposed a merger with UBS.

The demise of Credit Suisse has been a pain in the hearts of many in Switzerland, and the disaster has raised questions about the country's financial regulator and whether the authorities should have stepped in earlier before the crisis got out of hand.

Alexander, a professor of law and finance at the University of Zurich, bluntly said that Switzerland's reputation for prudence, stability and fiscal management has been hit hard again. This is an example of weak supervision leading to the failure of the banking industry.

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