Credit Suisse is poaching a Goldman Sachs partner oversee its battered risk management following the huge losses from Archegos and Greensill.
The Zurich-based bank is hiring David Wildermuth as its risk chief and part of its 12-person management, effective by February, it said in a statement on Tuesday. Currently deputy head of risk at Goldman Sachs, Wildermuth will replace Lara Warner, who resigned in April and report to CEO Thomas Gottstein.
This is the second major outside appointment since the arrival of António Horta-Osório as chairman amidst more than $5 billion in losses on Archegos as well as the implosion of a $10 billion line of funds with Greensill. The new hire also represents the second time Credit Suisse has tapped Goldman for top management this month: Joanna Hannaford joins as operating and technology chief in January.
Risk-Taking Shackled
Wildermuth will «help shape the group’s enhanced risk management framework, an essential part of the bank’s strategic realignment currently underway,» Horta-Osório said in a statement. Credit Suisse maintained various ties with Greensill, the insolvent supply chain finance firm, and suffered Wall Street's worst losses from the Archegos hedge fund dealings.
Credit Suisse locked down risk-taking following Archegos and Greensill, which both surfaced publicly in March. The two issues required a $1.9 billion capital infusion from anchor shareholders in April. The bank has suffered more than 30 defections at its investment bank since the scandals broke, according to «Bloomberg» (behind paywall).
Industry Veteran
Horta-Osório launched a review of Credit Suisse's risk, culture, and strategy when he arrived 12 weeks ago. Four weeks ago, he cautioned that investors and employees shouldn't look for a quick fix to the Swiss bank's problems.
Credit Suisse had replaced temporarily replaced risk chief Warner with Joachim Oechslin, who oversaw risk management at Credit Suisse until 2019. Oechslin will keep standing in until Wildermuth arrives in Zurich before returning to a job as senior adviser to Gottstein, the CEO.
Wildermuth has been the deputy to Goldman Sachs' chief risk officer, currently Brian Lee, for the last five years and a partner since 2010. He has held various risk and credit roles at the U.S. investment bank since joining 24 years ago.
