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Credit Suisse overhauls management as it takes $4.7 billion hit on Archegos

Credit Suisse announced earlier this week that it will take a $4.7 billion hit from dealings with Archegos Capital Management, prompting it to overhaul the leadership of its investment bank and risk divisions. Head of Financial Litigation, Robin Henry, comments.

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Published 8 April 2021

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“The removal of Credit Suisse’s top risk and compliance officer as a result of losses incurred by trades with Archegos Capital Management raises serious questions as to whether banks have sufficiently learnt lessons from the financial crisis and whether regulatory reforms since then have gone far enough to prevent investors suffering similar losses in future. Seeking higher returns, some banks seem to have focussed more on areas which are more lightly regulated such as lending to family offices and using total return swaps. The consequent lack of transparency may mean that banks are engaging in more risky behaviour than has been previously realised.”

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Shorter Reads

Credit Suisse overhauls management as it takes $4.7 billion hit on Archegos

Credit Suisse announced earlier this week that it will take a $4.7 billion hit from dealings with Archegos Capital Management, prompting it to overhaul the leadership of its investment bank and risk divisions. Head of Financial Litigation, Robin Henry, comments.

Published 8 April 2021

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Authors

“The removal of Credit Suisse’s top risk and compliance officer as a result of losses incurred by trades with Archegos Capital Management raises serious questions as to whether banks have sufficiently learnt lessons from the financial crisis and whether regulatory reforms since then have gone far enough to prevent investors suffering similar losses in future. Seeking higher returns, some banks seem to have focussed more on areas which are more lightly regulated such as lending to family offices and using total return swaps. The consequent lack of transparency may mean that banks are engaging in more risky behaviour than has been previously realised.”

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