Switzerland's national flag flies above the logo of Swiss bank Credit Suisse at its headquarters in Zurich, Switzerland April 18, 2021. REUTERS/Arnd Wiegmann/File PhotoChief Executive Thomas Gottstein has a chance to prove as much in the fight over losses from funds linked to collapsed financier Greensill Capital. Clients are understandably aggrieved, but offering to share the pain would be counterproductive.
The argument for compensation sounds persuasive. The funds’ investors include super-affluent families, companies, pension funds and clients of Credit Suisse’s Asia Pacific unit, the Financial Times reported. If Gottstein fails to cough up, they could easily pull business from other areas of the group like investment banking and the all-important wealth management division.
Partial reimbursement might be affordable. But it would also look a lot like admitting liability – dangerous as law firms prepare suits on behalf of angry investors. Gottstein’s shareholders and supervisor FINMA may also worry about the precedent: if compensating clients now represents a contingent liability for the bank, shouldn’t it have a higher capital ratio and lower valuation?
- Swiss diagnostic group Quotient said in a regulatory filing that it had put $110 million into the supply-chain finance vehicles, which Credit Suisse froze in early March. It believes any losses should be “borne by Credit Suisse ”.
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