The watchdog referred to how the bank had made serious breaches of risk management obligations. Credit Suisse said it was addressing the requirements that FINMA identified, and noted that the regulator hasn't ordered a confiscation of profits linked to the proceedings.

The Swiss Financial Market Supervisory Authority said yesterday that it has concluded its enforcement proceedings against Credit Suisse over the Greensill affair. FINMA said that Switzerland’s second-largest bank “seriously breached” its supervisory obligations in the case over risk management and appropriate organisational structures.

FINMA said it has ordered remedial measures. In future, the bank will have to periodically review at executive board level the most important business relationships (around 500) for counterparty risks. Credit Suisse must also record the responsibilities of its highest-ranking employees (approximately 600) in a responsibility document. The watchdog said that it has also opened four enforcement proceedings against former Credit Suisse managers.

The losses that Credit Suisse suffered due to its exposure to the now-defunct UK-based Greensill supply-chain finance group have helped to hurt the bank’s bottom line. Credit Suisse has also been hit with losses from its exposure to New York-based hedge fund/family office Archegos. These and other episodes have pushed the Zurich-listed bank into the red, forced it to restructure and seen the arrival and departure of C-suite executives.

In March 2021, Credit Suisse closed four funds at short notice that were related to companies of the financier Lex Greensill. 

These funds were distributed to qualified investors, whereupon their risk was indicated as low in the client documentation. At the time of the closure, clients had invested a total of around $10 billion in the funds, FINMA said in a statement.

Immediately after the funds were shut in March 2021, FINMA took various risk-reducing measures and opened enforcement proceedings. The focus was on the question of whether the Credit Suisse Group had violated Swiss supervisory law in its business relationship with Greensill.

“We welcome the conclusion of FINMA’s work. This marks an important step towards the final resolution of the SCFF issue. FINMA’s review has reinforced many of the findings of the board-initiated independent review and underlines the importance of the actions we have taken in recent years to strengthen our risk and compliance culture. We also continue to focus on maximising recovery for fund investors,” Ulrich Körner, chief executive of Credit Suisse, said.

The bank said all requirements identified by FINMA are being addressed through the organisational measures already underway. FINMA has not ordered any confiscation of profits in connection with the proceedings and the implementation of the additional measures is not expected to result in significant costs for Credit Suisse.