In the German version of Monopoly, the “Schlossallee” is the most expensive field. In the Swiss version of the board game, you have to shell out the most for the “Paradeplatz”. That fits. The real Paradeplatz is in the heart of Zurich and is one of the most expensive places in the world. It is considered a synonym for Swiss high finance. After all, Credit Suisse has its headquarters there. The major bank resides in an ornate sandstone building from the 19th century. Diagonally opposite is the much simpler office building of local rival UBS, which has its headquarters on posh Bahnhofstrasse. The two largest Swiss banks are powerhouses in the global financial industry. On behalf of well-heeled clients, they manage assets totaling more than 6 trillion dollars.
Credit Suisse is smaller than UBS. Nevertheless, the bank founded by the legendary business leader Alfred Escher in 1856 under the name of Schweizerische Kreditanstalt saw itself as an equal to its competitors for a long time. But that’s over. Credit Suisse, which with total assets of CHF 730 billion (EUR 742 billion) is one of the systemically important banks in Switzerland, has mutated into the biggest scandalous noodle in Europe’s financial sector. After a half-year loss of CHF 1.9 billion, wild rumors circulated at the beginning of October that the bank was allegedly about to collapse. That turned out to be nonsense. But there is no denying that Credit Suisse is seriously off track and urgently needs to correct its course.
Therefore, the long-suffering shareholders and the more than 50,000 employees are looking forward to next Thursday. Then the board presents the restructuring plan, with which he wants to stabilize the crisis-ridden financial giant again and – very importantly – win back the trust of customers.
Home made misery
How could it come to this? One thing is clear: Credit Suisse’s misery is homemade. It dates back to 2007. At that time, the American Brady Dougan moved to the head of the bank. The investment banker proved to be the right man to lead Credit Suisse through the financial crisis. In contrast to UBS, it did not have to be rescued with many billions from the Swiss state coffers. But after the financial crisis, the board of directors should have replaced Dougan. Because he was only interested in investment banking – he neglected the comparatively boring asset management business and the universal bank in the Swiss home market. UBS, on the other hand, severely scaled back the risky and volatile capital market business as a result of the near-death experience during the financial crisis and from then on concentrated its energies primarily on looking after wealthy private clients around the world. She is very solid today.
It wasn’t until 2015 that Brady Dougan had to vacate his place for Tidjane Thiam. But the successor, proudly conjured out of a hat by the long-standing Chairman of the Board of Directors, Urs Rohner, also proved to be the wrong choice. The self-confident Franco-Ivorian had made a name for himself as head of the British insurer Prudential. However, he was unfamiliar with banking until he moved to Zurich. That linked him to Rohner in a fatal way: The lawyer and former head of the broadcaster Pro Sieben Sat.1 had hardly any idea of the shoals and risks in the global (investment) banking business. The fact that he was laughed at (some even say: despised) by both Dougan and Thiam would not have been a problem if the concentrated incompetence in the top management had not come to fruition in a devastating way.
