The collapse of Credit Suisse, the Swiss banking giant that ended its 167-year history on Monday morning in a state-sponsored takeover by rival bank UBS, was not the result of mismanaging liquidity or interest rate risk like Silicon Valley Bank, but rather death by a thousand self-inflicted cuts.
The past decade featured an endless parade of costly, headline-grabbing stumbles and scandals, including criminal money laundering, involvement in drug trafficking, wire fraud, spying on employees, client lawsuits, and even violating quarantine protocols when the bank’s CEO flew to England to attend Wimbledon in the midst of the COVID pandemic.
The tip of the iceberg was the 2019 “spygate scandal,” a bizarre incident in which the bank hired private investigators to spy on Iqbal Khan, its former head of wealth management who had just been fired and who had accepted a job at UBS. This followed a conflict between Khan and bank CEO Tidjane Thiam, who were neighbors in Zurich, over Khan’s noisy and disruptive house renovations next door to Thiam’s residence….