Credit Suisse adds another record fine to its collection after Archegos collapse

CHRIS DORRELL

CREDIT SUISSE has been hit with a record £87m fine by the Prudential Regulation Authority (PRA) for its failures relating to the collapsed hedge fund Archegos Capital.

The fines form part of a coordinated global penalty, including actions from the Swiss regulator

Finma and the Federal Reserve, which will cost Credit Suisse over $387.5m (£302.3m).

The PRA criticised Credit Suisse’s “significant failures in risk management and governance” between the start of 2020 and the end of March 2021.

“This is the PRA’s highest fine and the only time a PRA enforcement investigation has established breaches of four PRA fundamental rules,” the PRA said.

Credit Suisse would have faced a fine of £124.4m, but it was reduced after the bank agreed to resolve the issue rather than fight.

The fines are directed at Credit Suisse Securities and Credit Suisse International, which provided prime brokerage services to Archegos and entered equity total return swaps with the fund. The PRA said the risk management fell “well below the regulatory standards required”.

“The failings were found to be symptomatic of an unsound risk culture within the business line,” the watchdog said.

UBS, which acquired Credit Suisse in March, has already agreed to pay off the fines. Earlier this year, it said it had set aside $4bn for potential lawsuits relating to the takeover.

UBS said it “will implement its operational and risk management discipline and its culture across the combined organisation”.

Credit Suisse was contacted for comment.