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Credit Suisse has formed a new group to control commercial risk in its investment bank as it begins reviewing its controls and processes after losing $ 5.5 billion over the collapse of the Bill Hwang family office, Archegos Capital .
Amelie Perrier will lead the new unit, called counterparty market risk. It will monitor the commercial positions of its main customers and their potential impact on the bank in order to avoid another catastrophic loss for the Swiss lender.
Perrier had been global head of equity market risk and joined Credit Suisse in 2016. His appointment was announced Friday in an internal note Friday, which was first published by the Wall Street Journal.
This year Credit Suisse has been reduced the tension of two crises which revealed critical weaknesses in the bank’s risk management and culture. He was forced to raise capital after the main brokerage unit serving the hedge funds lost billions when the stock bets he had financed for Archegos turned sour.
The business loss came after the closure of $ 10 billion in funding funds from the Credit Suisse supply chain linked to insolvent financing group Greensill Capital. Regulators could cost bank customers up to $ 3 billion.
The new chair is António Horta-Osório reviewing risk operations and the strategic direction of the lender. Several responsible executives have left the bank.
Despite extending billions of dollars in credit to Archegos, the FT has reported that Credit Suisse earned only $ 17.5 million from last year’s relationship. The low level of commissions and an unexpectedly high risk exposure (estimated at about $ 20 billion) caused alarm among the board and the administrators who are investigating the deal. The results will be published this summer.
Other lenders, including Deutsche Bank and Goldman Sachs, also had exposure to Archegos, but had adequate risk controls and had sufficient margin to change positions without losses.
However, Morgan Stanley, UBS and Nomura lost $ 5 billion collectively.
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