Credit Suisse began to reform its controls and processes after losing US$5.5 billion due to the collapse of Bill Huang’s family office Archegos Capital, so it established a new team to monitor the transaction risks of its investment banks.
Amelie Perrier will lead a new department called Counterparty Market Risk. It will track the trading positions of its major customers and their potential impact on the bank to prevent Swiss banks from suffering catastrophic losses again.
Perrier served as the global head of equity market risk and joined Credit Suisse in 2016. Her appointment was announced in an internal memo on Friday, which was first reported by the Wall Street Journal.
Credit Suisse has been The pressure of two crises This reveals serious weaknesses in bank risk management and culture. After the stock market bet that funded Archegos went bad, it was forced to raise funds after the prime brokerage arm that services hedge funds lost billions of dollars.
The trading losses occurred after the closure of the $10 billion supply chain finance fund related to the bankrupt financial group Greensill Capital of Credit Suisse. This could cost the bank’s customers as much as US$3 billion, and it is under investigation by global regulators.
The new chairman, António Horta-Osório (António Horta-Osório) is Review The lender’s risk operations and strategic direction. Several responsible executives have left the bank.
Although it provided Archegos with billions of dollars in credit, according to the Financial Times, Credit Suisse Only made 17.5 million U.S. dollars From last year’s relationship. The low cost and unexpectedly high risk—estimated at approximately US$20 billion—have alarmed the board and managers, who are investigating the arrangement. The results will be announced this summer.
Other lenders including Deutsche Bank and Goldman Sachs also have Archegos exposure, but have sufficient risk control and hold sufficient margin to close positions without causing losses.
However, Morgan Stanley, UBS and Nomura lost a total of $5 billion.