August 1, 2021

Credit Suisse / Finance: Chain mergers

It was the week UBS needed to focus attention on its risk management, with the opening of its appeal trial in France. It is in fact Credit Suisse which is sticking to it, with the liquidation of funds linked to the fintech Greensill, a source of pride until recently. The old commercial discount (customer debts to their suppliers) brought up to date with “supply chain financing” also satisfied the thirst for yield of a thousand very large investors. Without being stamped systemically, the case reminds us to what extent institutional management has remained addicted to risk transfer mechanisms, in this case credit insurance coverage withdrawn by a subsidiary of Tokio Marine. The funds in question represent much less than 2% of assets under management (excluding wealth management) of the second Swiss bank and its shortfall in commissions would be less than 1% of its profit before tax, according to analyst calculations. But boss Thomas Gottstein will have to overcome the risk of litigation and reputation to restore his stock market image as hoped. Lex Greensill had focused the celebrities in his agenda, from David Cameron to Prince Charles through Masayoshi Son. It turns out that it had also focused its funding a little too much on Sanjeev Gupta (Ascoval and Aluminum Dunkerque), not to mention the case of fintechs linked to SoftBank.

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