Thoughts on the Failure of Credit Suisse

As many of you know, I worked at Credit Suisse from 2006-2008. Reading that Credit Suisse is being bought by UBS and will be dying as an institution gives me some Schadenfreude. Since leaving Credit Suisse, I have been disappointed in the negative public announcements about the bank’s activities besides its, once again, mishandling of its finances. The incidents that stand out besides the current one are Credit Suisse receiving the largest fine by the US with respect to violating our Economic sanctions with Iran (2009), receiving another fine by the US for “bundling mortgage loans with securities [and] misrepresenting the risk” of those “mortgages during the housing boom” (2012),[1] receiving the most recent fine of a staggering 2.6 billion dollars that the Justice Department levied against the bank for violating our tax laws (2014),[2] and last, but not least, receiving world-wide attention the past few years with leaks coming from the bank that it had accounts with human-traffickers, criminal businessmen (i.e. Russian Oligarchs), corrupt autocrat Egyptian President Hosni Mubarak, Nigerian dictator Sani Abacha, corrupt Filipino dictator Ferdinand Marcos, head of the SS, Reichsführer Heinrich Himmler, Italian Fascist Dictator Benito Mussolini, and 12,000 accounts of former-Nazis who fled to Argentina.[3]   Also, the more I learn about how the bank treated Holocaust victims, stealing their assets and not returning them to their surviving families, I regret that I ever worked at that firm. My dear friend and mentor, Holocaust historian Michael Berenbaum, has educated me about how Credit Suisse pursued anti-Semitic policies and got away with one of the largest “robberies” in history.[4] The reparations paid in the 1990’s leave a lot to be desired. In short, since leaving the firm, I came to learn that the bank’s policies, and Switzerland’s banking secrecy laws, “are immoral.”[5] Sadly, UBS was shoulder to shoulder with Credit Suisse in bad behavior, so in some respects, the Swiss authorities are using Satan to caste out Beelzebub. Nonetheless, it will be nice to see this Swiss institution crumble during the next few weeks. As a historian, I hope they do not destroy its documents like it tried to do with its Holocaust documents in the 1990s so researchers can learn from its failure to help future institutions become more moral and ethical. One can only hope.   

[1] New York Times, “New York Sues Credit Suisse Over Mortgages,” 29 Nov. 2012.

[2] New York Times, “Iranian Dealings Lead to a Fine for Credit Suisse” by Claudio Gatti and John Eligon, 15 Dec. 2009; The Wall Street Journal, “Credit Suisse’s Secret Deals,” Aaron Lucchetti and Jay Solomon, 17 Dec. 2009;  Financial Times, “Credit Suisse Pleads Guilty to Tax Evasion,” tom Braithwaite, 19 May 2014.

[3] Douglas Bloomfield, “Credit Suisse Scandal is Nothing New for Bank that Helped Nazis—Opinion,” The Jerusalem Post, 23 February 2022; Wiesenthal Center Uncovers List of 12,000 Nazis in Argentina with Accounts Transferred to Credit Suisse, Jewish News Syndicate, 4 March 2022; Jane Schapiro, Inside a Class Action: The Holocaust and the Swiss Banks, Madison, 2003, 47, 114, 129, 131, 137, 157-9; Doug Chayka, “Revealed: Credit Suisse Leak Unmasks Criminals, Fraudsters and Corrupt Politicians,” The Guardian, 20 February 2022.

[4] Discussion with Michael Berenbaum with Bryan Mark Rigg, 24 May 2014. 

[5] Doug Chayka, “Revealed: Credit Suisse Leak Unmasks Criminals, Fraudsters and Corrupt Politicians,” The Guardian, 20 February 2022