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Switzerland’s role as banker to the world’s rich was built on a reputation for institutional discretion and dull reliability. That only made the scandals, public legal battles and mounting losses at Credit Suisse Group AG more striking and hard to comprehend. In March, a slow-burn crisis turned into full-blown panic, clients ran for the door and the Swiss government swooped in to arrange a hasty takeover by local rival UBS Group AG. Thus an icon of Swiss financial prowess that was established in the mid-19th century and rose to become one of the world’s 30 systemically important lenders was no more.
Credit Suisse’s failings included a criminal conviction for allowing drug dealers to launder money in Bulgaria, entanglement in a Mozambique corruption case, a spying scandal involving a former employee and an executive and a massive leak of client data to the media. Its willingness to engage with clients that some other banks avoided, such as disgraced financier Lex Greensill and failed New York-based investment firm Archegos Capital Management, lost it billions of dollars and compounded the sense of an institution that didn’t have a firm grip on its affairs. Many fed up customers voted with their feet, leading to unprecedented client outflows in late 2022. The loss of business was especially dramatic in Asian wealth management, which for many years had been an important source of profit growth.
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