Credit Suisse First Boston denies wrongdoing in Ukraine loan probe

Credit Suisse First Boston has told a United States Congressional Banking Committee (US treasury secretary, Lawrence Summers, right) that it was not involved in any illegal transactions in a loan scandal involving Ukraine and the IMF.

Representatives of Credit Suisse First Boston (CSFB) have told a United States Congressional Banking Committee that the Swiss group was not involved in any illegal transactions in a loan scandal involving Ukraine and the International Monetary Fund.

James Healy, head of CSFB’s emerging markets division, told the Banking Committee in Washington that an internal investigation gave no indication that money from Ukraine’s central bank ended up in the hands of any unauthorised third party.

Healy was referring to allegations that CSFB helped the Ukraine National Bank make dubious transactions in order to falsely inflate its hard currency reserves to secure IMF loans. Some of the money in question wound up in a Cyprus-registered affilitate of CSFB.

Healy also denied that the Swiss bank had any previous knowledge of details of Ukraine’s deal with the IMF.

The US treasury secretary, Lawrence Summers, told the banking committee that the incident raised serious questions about the way the IMF does business. He demanded that the Washington-based institution tighten its auditing controls.

The scandal has prompted Switzerland’s Federal Banking Commission to investigate the Swiss bank.

swissinfo with agencies