Banking regulators, including the Bank of England, have fined UBS around $387m (£301m) for Credit Suisse’s misconduct linked to its dealings with the defunct investment firm Archegos Capital Management.
Archegos Capital Management was created by Korean-US businessman Bill Huang who made billions by betting on US and Chinese companies using money borrowed from major global banks who lost over $10bn in a matter of days when a series of financial bets went wrong.
Archegos collapsed in 2021. Credit Suisse suffered more than £4bn losses when it did. Mr Huang is expected to face trial for fraud in the US later this year.
The Bank of England’s Prudential Regulation Authority (PRA) imposed a record £87m fine after finding Credit Suisse’s supervision of risk management when dealing with Archegos “fell well below the standards required”.
It found that the failings were “symptomatic of an unsound risk culture” within the bank.
The US Federal Reserve imposed a $269m (£209m) penalty on the bank for “unsafe and unsound counterparty credit risk management practices.
Credit Suisse was taken over by Zurich-based rival UBS earlier this year in a deal brokered by Swiss regulators, who feared that the bank faced collapse in a credit crisis.
The PRA concluded that Credit Suisse failed to properly address the risk from Archegos and found a “confusion of responsibilities and failures to adequately respond when limit breaches were exceeded”.
PRA chief executive Sam Woods said: “Credit Suisse’s failures to manage risks effectively were extremely serious, and created a major threat to the safety and soundness of the firms.
“The seriousness and widespread nature of those failures has led to this fine, which is the largest ever imposed by the PRA.”