Credit Suisse has accumulated more than $ 20 billion (€ 16.6 billion) of exposure to Archegos-related investments, reveals the Wall Street newspaper. “Managing Director Thomas Gottstein and Chief Risk Officer Lara Warner, who recently left the bank, only became aware of the bank’s exposure to Archegos in the days leading up to the forced liquidation of the fund,” adds the financial daily, citing people close to the bank.
“Neither Thomas Gottstein nor Lara Warner knew that the fund was a major client before,” the people said.
This information is published as Credit Suisse will unveil its quarterly results on Thursday, which will be scrutinized by shareholders and investors.
Credit Suisse failed to protect itself from its exposure to Archegos
Switzerland’s second-largest bank has already indicated that a charge of 4.4 billion Swiss francs (some 3.9 billion euros) would be entered in its accounts to cover the damage related to Archegos. This American family-owned investment firm of former Tiger Asia director Bill Hwang had taken huge bets on a few stocks with money borrowed from banks.
When some important positions reversed and Archegos could not respond to margin calls, it triggered one of the biggest sudden losses in Wall Street history.
According to the sources of the WSJ, Credit Suisse failed to protect itself from its exposure to Archegos, “in part because it had not yet implemented a system that monitored the risk in real time” of its positions.