Credit Suisse has received a new setback as FCA placed the bank on a tougher supervision watchlist

Credit Suisse has been placed on the Financial Conduct Authority's (FCA) watchlist of institutions that require more stringent oversight.

Out of the 60,000 institutions regulated by the FCA, Credit Suisse is one of about 20 on the list.


Officials closely monitor groups on the list, which are required to show progress and address the root causes of issues of concern, according to the Financial Times.


The FCA took the action because it was concerned that the Swiss banking giant had not done enough to improve its culture, governance, and risk controls.


In a letter to Swiss bank leadership, the authority demanded proof of the bank's efforts to prevent misconduct and improve accountability.


The FCA cited "persistent" cultural issues, such as a lack of internal challenges to risky transactions, and stated that "sufficient evidence of effective remediation" was lacking.

After consulting with Finma, the Swiss regulator, the FCA said it had requested the reviews. Finma did not respond to a request for comment.


Credit Suisse has been in the news a lot in the last two years, including:


1. The publication of the 'Credit Suisse Secrets' story, which details the bank's decades-long relationships with autocrats and organized crime.

2. A court case in which a senior employee described a culture of dealing with high-net-worth individuals with few or no compliance safeguards.

3. Greensill Capital's collapse in March 2021, which forced the bank to close $10 billion in funds tied to the supply chain group.

4. Following the collapse of family office Archegos, Credit Suisse suffered a $5.5 billion trading loss, the largest in its 166-year history.

5. For its role in the long-running Mozambique 'tuna bonds' scandal, the bank paid a £147 million fine to four regulators in three countries in October.

6. Because the bank's international division and UK operations are regulated by the FCA, they have been placed on a watchlist.


The bank must conduct a review of the effectiveness of Credit Suisse International's board, risk, and audit committees in the second half of the year, according to the authority.


The FCA is also concerned about whether the bank adequately reported breaches of conduct rules for a number of years, citing a lack of curiosity on the bank's part about the root causes of its failures, according to the correspondence.


Lendy, the now-defunct UK peer-to-peer lender, and Provident Financial, the subprime lender under investigation by the regulator for its loan assessment, are among the institutions on the watchlist.


"We do not comment on our discussions with regulators, nor would it be appropriate for us to do so," Credit Suisse said in a statement to the Financial Times. "As we have summarised before, we are now well advanced in executing the plan to strengthen our businesses and our risk culture."


The FCA did not comment on the matter.


Separately, Credit Suisse announced in late April that David Mathers, CFO and CEO of Credit Suisse International, would be stepping down from both positions once a successor was found.

By fLEXI tEAM