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Dragging heels Credit Suisse/Finma: the usual suspects


Who could ever have suspected it? Weak money-laundering defences at a Swiss bank, of all places. And in relation to Fifa and Petrobras, those beacons of moral probity. Thank heavens regulator Finma has shown how seriously Switzerland regards lapses at Credit Suisse. It has issued a press release.

Enough sarcasm. European banking has a lucrative history of controls lax enough for money laundering and tax evasion to flourish. Tighter public morality is making this expensive for shareholders and bosses, as scandals at Danske and ING illustrate.


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Further trouble may be brewing. Finma has been probing several banks in relation to suspected corruption at Fifa, which runs world football, and to Petrobras of Brazil and Venezuela’s PDVSA. The regulator cannot levy fines. It can only demand reforms. It may be able to time announcements for best effect, however.

If that applies here, Finma’s action against Credit Suisse may be the drum roll rather than the execution. Worse revelations may follow concerning other banks. The risk of tough US intervention would be higher.

Dirty money Credit Suisse found lacking in fight against money laundering

Swiss bank Credit Suisse has failed to meet its obligations to prevent money laundering, says Switzerland’s financial supervisory authority.

This content was published on September 17, 2018 8:57 PM

The Swiss bank hardly smells of roses. Finma identified a second set of breaches evidently related to Patrice Lescaudron. The Credit Suisse manager was jailed for five years in February for frauds against former Georgian premier Bidzina Ivanishvili, among others. Tempting fate - and the judge - he wore a Ferrari fleece to court.

Credit Suisse boss Tidjane Thiam comes out of the affair better. Most compliance failures were before 2014. He joined as a troubleshooter a year later and quickly shook up compliance. Finma says he must go further. That will help him drive colleagues towards an important goal: systems linking clients to every account they hold.

The inertia of a big European bank rivals that of a civil service. The Credit Suisse turnround is painfully slow going. But the gap with UBS is eroding. Credit Suisse shares trade at par with tangible book value, compared with UBS at 1.3 times. Credit Suisse stock bottomed at 0.6 times book value two years ago, following hefty write-offs.

Thiam says he will see the turnround through. Still, no one should be shocked by a presidential run (in Ivory Coast, his homeland) any more than weak money-laundering controls at a Swiss bank. Jamie Dimon excepted, candidates customarily say they have no ambitions, until, suddenly, they do.

Copyright The Financial Times Limited 2018

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