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Credit Suisse's decline culminated in its takeover by UBS on March 19, 2023, following years of gradual disintegration. Despite ambitious restructuring plans under the "Kilimanjaro" project, the bank faced a catastrophic loss of client trust, exacerbated by the SEC's ban on its annual report and a bank run triggered by the collapse of Silicon Valley Bank. As clients withdrew billions, the internal control failures and ongoing disputes with regulators pushed Credit Suisse to the brink of insolvency.
Credit Suisse's claims of financial solidity were undermined by a regulatory filter that obscured its true capital deficiencies, leading to a crisis that culminated in its takeover by UBS. Despite meeting legal requirements, the bank's equity was insufficient, prompting significant customer withdrawals and legal challenges over cancelled AT1 bonds. Experts call for greater transparency in banking accounts to prevent similar situations in the future.
In spring 2022, Bob Diamond proposed a five billion franc offer to acquire Credit Suisse's investment bank, which was rejected by Chairman Axel Lehmann. Following this, the bank faced a massive withdrawal of 87 billion francs in client assets by October 2022, leading to its emergency takeover by UBS in March 2023. Despite efforts to realign the bank, it ultimately failed to recover from its crisis.
Credit Suisse's downfall may have been preventable, as reports indicate that an offer to sell its investment bank for CHF 5 billion was rejected by management a year before UBS's takeover. Bob Diamond confirmed his interest in acquiring the investment bank, while a buyer for Asset Management was also found, willing to pay CHF 5 billion. Ultimately, UBS acquired Credit Suisse for just CHF 3 billion, leaving shareholders with minimal returns.
One year before its collapse, Credit Suisse rejected a crucial offer from American banker Bob Diamond to buy its investment bank for CHF 5 billion, a decision made by Chairman Axel Lehmann. This rejection, alongside poor strategic choices and internal conflicts, led to significant liquidity issues and a massive withdrawal of client funds, ultimately resulting in the bank's downfall. The situation worsened with a failed savings program and skepticism surrounding new management strategies, culminating in the bank's final crisis.
The fall of Credit Suisse is detailed in a new book and film by Arthur Rutishauser and Simon Helbling, revealing a leadership team in disarray as they faced impending collapse. Despite a last-ditch effort for help from UBS, the bank's fate was sealed when it was sold at a bargain price on March 19, 2023. Notably, Bob Diamond had previously offered $5 billion to separate CS's troubled investment bank, but the proposal was ultimately rejected as the bank pursued other plans.
Credit Suisse's management faced turmoil as it attempted to restructure amid significant financial losses and a massive cost-cutting program. CEO Axel Lehmann and Ulrich Körner aimed to transform the investment banking division into an advisory service, but internal conflicts and a lack of transparency led to a plummeting share price and fears of a bank run. Key figures, including Michael Klein and Blythe Masters, were embroiled in conflicts of interest, complicating the bank's recovery efforts.
Lukas Gähwiler, UBS Vice-Chairman, has relocated from Langnau am Albis to Oberägeri, a tax haven in Zug, ahead of his retirement. This move allows him to significantly reduce his tax burden, as Oberägeri offers lower municipal and cantonal tax rates compared to his previous residence. As he approaches retirement, Gähwiler's decision reflects a trend among the wealthy to optimize tax benefits related to pension payouts.
Rolf Olmesdahl, previously a key figure in Raiffeisen Switzerland's management, is being considered for the CEO position following the departure of Heinz Huber after an IT crisis. With a background in computer science and significant experience in banking, including a successful tenure at UBS, Olmesdahl has been instrumental in IT transformations and is currently overseeing the integration of Old CS Switzerland into New UBS.
In December 2022, Ueli Maurer misled the public about the stability of Credit Suisse, despite knowing the bank was in crisis. Following a significant liquidity outflow, he and CS Chairman Axel Lehmann falsely assured the public of a stabilized situation, while internal discussions revealed growing concerns about the bank's viability. By late December, CS's liquidity had drastically diminished, leading to its eventual downfall just months later.
Ulrich Körner
People
The information provided herein is generated by experimental artificial intelligence and is for informational purposes only.
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