MELTDOWN

A top business reporter unravels the failure of Credit Suisse.

When the once-mighty topple with a thundering crash, there are inevitably questions about how it happened. In the case of the fall of Credit Suisse, Mavin, a respected financial journalist, pulls together evidence from official documents, media reports, and personal interviews to piece together the story. He traces many of the problems to Credit Suisse’s 1988 decision to move into the U.S. through the acquisition of investment bank First Boston. But the American banking market is far different from the starchy, conservative Swiss culture. In the early years, a lot of money came in, but Credit Suisse was working in a high-risk business without proper mechanisms for risk evaluation and mitigation. Even more, the move triggered a period of overexpansion and dubious deals, including tawdry secret transfers of funds for dictators and criminal kingpins. This led to a string of scandals. “From 2010 onwards, the bank paid fines of more than $15 billion in relation to misconduct by its own employees,” Mavin writes. As operational losses due to bad investments mounted, there was a large turnover of senior executives. In one seven-year period, the bank churned through four CEOs. All this led to a collapse of reputational trust, and in 2023 Swiss regulators declared the bank unviable. A takeover by long-standing rival UBS was hurriedly put together. “Credit Suisse usually had plenty of capital,” Mavin writes, “but, in the end, it ran out of trust.”

A remarkable account of a complex story.