The Swiss bank is clearly grappling with the question of who among its top executives is accountable for the Greensill disaster. Risk boss Lara Warner reportedly approved a $160 million to Lex Greensill.
Two weeks into the Greensill implosion, top executives at Zurich-based Credit Suisse appear to be scrambling to distance themselves from the teetering U.K. supply chain financier as well as its billionaire co-founder Lex Greensill. On Wednesday, the bank temporarily replaced three asset managers involved in setting up and managing the Greensill products.
For Credit Suisse, the matter is far more complicated because it maintained relationships to Greensill himself – the kind of wealthy private client most Swiss banks hunt. Credit Suisse investment bank were also reportedly lined up for a Greensill initial public offering this year – besides the asset management ties.
Various Greensill Layers
The bank is scrambling to figure out how bad the damage is, and where to assign the blame, the «Financial Times» (behind paywall) reported. The first public sign of the various layers is a $160 million loan to the U.K. company late last year.
By then, Credit Suisse apparently already knew that Germany's financial regulator was investigating a Bremen-based bank controlled by Greensill. Lara Warner signed off on the loan after a back-and-forth between risk managers and top executives in Zurich, the «FT» and «Bloomberg» (behind paywall) reported.
Warner, a 53-year-old American-Australian investment banker, has overseen either compliance or risk at Credit Suisse since 2015. The outstanding amount of the loan is now $140 million, according to the outlets – apparently Greensill Capital had paid a small portion back before applying for administration this week.
Never Met CEO In Person
Credit Suisse boss Thomas Gottstein, in the job for just over one year, told associates he'd spoken to Lex Greensill once over the phone, and never met him in person, according to the «FT». As the Swiss bank embarks on a nightmarish unwind of the Greensill assets, it faces the tricky decision on whether to compensate investors for losses.
The question of accountability also looms, amid a reputational wipeout for doubling down with Greensill as well its founder. Commentators have posited that Credit Suisse's various touch-points with Greensill – emblematic of its «one-bank» pursuit of entrepreneurs – may have weakened its overall management of the risks.
High-Stakes For Jobs
For now, Credit Suisse is enlisting help in responding to queries from regulators in Switzerland, the European Union, Britain, Luxembourg, and Australia, the outlets reported. The supply chain blow-up at Credit Suisse is high-stakes: Greensill is a major provider of funding to steel tycoon Sanjeev Gupta's GFG.
The group of companies had told a court last month that it would be insolvent without Greensill's funding, «Bloomberg» reported on Thursday. GFG employs roughly 35,000 people. Greensill employs another 1,000 people.
