Ideally, you’d rent an individual to keep watch over the dangers your counterparties are taking earlier than certainly one of them prices you $5.5 billion, many legal bills, a great deal of talent, maybe an antitrust prosecution and the ire of the Swiss people. Of course, no one does this, and anyway Credit Suisse was spending that cash keeping an eye on its own employees slightly than on the likes of Archegos Capital Management which, it admits looking back, was a poor allocation of assets for lots of causes.
In actuality, after all, you solely rent such an individual after the factor that individual would have stopped has already occurred, price you $5.5 billion, and many others.
The new perform, known as counterparty market threat, might be headed by Amélie Perrier…. Perrier will concentrate on bettering how Credit Suisse measures threat for counterparties, in keeping with the memo. This means conserving monitor of risks build up within the funding positions of shoppers that would spring again on the financial institution…. The appointment of the brand new place is an acknowledgment that a part of the Archegos failure stemmed not simply from the funding agency failing to fulfill its obligations from a credit score threat perspective, however as a result of Credit Suisse didn’t adequately defend itself from the underlying positions Archegos held.
Credit Suisse Adds Risk Role to Prevent Another Archegos [WSJ]
Credit Suisse loses more senior bankers as Archegos hit takes toll [FN]
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