Credit Suisse: a failure of regulatory culture - OMFIF

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• no matter what banks and regulators say, risk and control teams are taking day-to-day ownership of risk because the business assumes those infrastructures can be relied upon to flag concerns instead of keeping track themselves

• it has not involved the revelation of hidden losses or a ‘black hole’ in the bank’s accounts, but instead the erosion and finally collapse of its reputation in the eyes of its customers

• Banking is above all about trust and customers finally voted with their deposits

• the culture of the bank seems to have remained firmly rooted in traditional (and outdated) concepts of Swiss bank secrecy that prioritise wealth concealment, anonymity and tax avoidance

• That culture is reflected in those multiple fines for failures in financial crime prevention and repeated exposure in media leaks of controversial financial activity

• culture drives conduct

• isn’t the failure of Credit Suisse also the failure of a regulatory model obsessed with hyper-granular risk assessments and documented audit trails explaining why actions were and were not taken in relation to individual transactions

• professional competence

• accounting rules

• You need qualified staff whose work is checked by senior internal and external staff upon whose expertise you rely in matters of technical detail

• those teams are struggling simply to achieve basic regulatory compliance, let alone significant risk mitigation

• Better big picture business management is

• key causes were staff turnover and the replacement of experienced professionals with juniors

• the health of the bank than with their own payslip