What's happened
A report by Swiss regulator Finma reveals that Credit Suisse managers were warned about the risks of dealing with Greensill Capital as early as 2018. The warnings came before Greensill's collapse in 2021, which significantly impacted Credit Suisse's operations and led to its own downfall in 2023.
What's behind the headline?
Key Insights
- Warnings Ignored: The Finma report indicates that Credit Suisse received multiple anonymous warnings about Greensill's character and business practices, yet chose to proceed with their partnership.
- Impact of Greensill's Collapse: The failure of Greensill Capital not only led to significant financial losses for Credit Suisse but also eroded investor confidence, contributing to the bank's eventual collapse in March 2023.
- Legal Ramifications: The ongoing trial involving Credit Suisse and SoftBank highlights the complex financial arrangements that led to investor losses, with Greensill's testimony central to the proceedings.
- Future Implications: As UBS seeks to recover funds for Credit Suisse's former clients, the outcomes of these legal battles may set precedents for accountability in financial partnerships and risk management practices in the banking sector.
What the papers say
According to Kalyeena Makortoff in The Guardian, the Finma report revealed that Credit Suisse managers were warned about their dealings with Greensill as early as 2018, raising 'strong doubts' about the bank's strategy. The report also noted that Credit Suisse's failure to heed these warnings contributed to its own downfall. Meanwhile, Bloomberg reported on Greensill's testimony in a London trial, where he claimed that senior SoftBank executives felt threatened by his relationship with Masayoshi Son, indicating the high stakes involved in these financial dealings. The trial is part of Credit Suisse's efforts to recover $440 million from SoftBank, highlighting the ongoing fallout from Greensill's collapse.
How we got here
Credit Suisse's dealings with Greensill Capital, which collapsed in March 2021, have come under scrutiny following a Finma report. The report highlights multiple warnings to Credit Suisse about the risks associated with Greensill, particularly concerning its ties to troubled companies.
Go deeper
- What were the specific warnings Credit Suisse received?
- How did Greensill's collapse affect investors?
- What are the implications of the ongoing trial?
Common question
-
What Warnings Did Credit Suisse Receive About Greensill?
Credit Suisse's dealings with Greensill Capital have raised significant concerns, especially following a recent report by Swiss regulator Finma. This report reveals that the bank ignored multiple warnings about the risks associated with Greensill as early as 2018. As the ongoing trial with SoftBank unfolds, many are left wondering about the implications for the banking sector and the broader financial landscape.
More on these topics
-
Credit Suisse Group AG is a global wealth manager, investment bank and financial services company founded and based in Switzerland.
-
The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom or Britain, is a sovereign country located off the northwestern coast of the European mainland.
-
SoftBank Group Corp. is a Japanese multinational conglomerate holding company headquartered in Tokyo. SoftBank owns stakes in many technology, energy, and financial companies.
-
Alexander David "Lex" Greensill CBE is an Australian businessman, best known for being the founder of Greensill Capital, a company focused on supply chain finance and derivative financial products that on 8 March 2021 filed for insolvency protection and f
-
Greensill Capital a financial services company based in the United Kingdom, focused on the provision of supply chain financing and related services. The company was founded in 2011 by Lex Greensill.
-
UBS Group AG is a Swiss multinational 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 as the largest Swiss banking