merelygifted:

Analysis: Bosses will have to prove their aversion to dubious wealthy clients if they are to regain trust of markets and regulators

Credit Suisse had a message for investors during its recent earnings call. The bank was planning to change course after a tumultuous 12 months in which it was embroiled in the collapse of the US hedge fund Archegos and the supply-chain finance company Greensill Capital.

“This will not be a quick fix, and we expect 2022 will be a transition year,” the chief executive, Thomas Gottstein, said on a conference call on 10 February. “But we have made clear progress in creating the conditions for a much more stable and predictable bank.”

More “predictable”, in banking parlance, was code for reining in its riskier investment bank – which offers trading, fundraising services and deal advice to firms – and pivoting towards a more stable source of income: wealth management.

Yet that pillar of Credit Suisse’s business – cultivating rich clients for a range of banking services – is precisely what has come under the spotlight in the revelations in the Suisse secrets project.

A massive leak has revealed that Credit Suisse harboured the hidden wealth of clients involved in torture, drug trafficking, money laundering, corruption and other serious crimes. The revelations point to apparently widespread failures of due diligence by the lender, despite repeated pledges to weed out dubious clients and stamp out illicit funds.

In response, Credit Suisse said it was unable to comment on specific clients but “strongly rejects the allegations and inferences about the bank’s purported business practices”, which it said were “based on partial, selective information taken out of context, resulting in tendentious interpretations of the bank’s business conduct”.

However, the simultaneous disclosures by 48 media organisations have raised painful questions for the bank. For anyone who has followed the string of scandals in recent years, they will have a familiar ring.  …