FINMA: Credit Suisse ‘seriously breached’ duty regarding Greensill

Poor risk management by Credit Suisse’s asset management company kept the Swiss bank mostly unaware of the risky nature of lending procedures used by financier Lex Greensill that would lead to the collapse of his supply chain startup, according to Switzerland’s Financial Market Supervisory Authority (FINMA).

Credit Suisse’s asset management company had little knowledge or control over securitized claims made by Greensill on behalf of four Credit Suisse funds from 2017-21. In addition, the bank did not have any insight or control over insurance coverage made in its name for those claims, FINMA said.

As a result, Credit Suisse breached its supervisory obligations regarding its risk management practices and was ordered by FINMA on Tuesday to implement remedial measures to address the shortcomings.