The major Swiss bank will not only present quarterly figures on Thursday, but also a restructuring plan.
(Photo: dpa)
The major Swiss bank Credit Suisse only has a few days to present a restructuring plan. A long series of scandals and bad decisions have put the financial institution in such a precarious position that even rumors about the bank’s stability made the global markets nervous for a few days.
Credit Suisse boss Ulrich Körner will present a new strategy on Thursday, and he will certainly explain to long-suffering investors how he intends to finance the restructuring. But that is not enough.
In order to really get out of the crisis, Credit Suisse has to do something for which there is unfortunately no other term than the overused word “cultural change”.
The history of Deutsche Bank shows how important the amorphous, difficult to grasp concept of corporate culture is. Anyone who has followed the fate of the Frankfurt financial institution is experiencing a déja vu today.
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Much like Deutsche Bank, Credit Suisse entered investment banking decades ago with a large-scale takeover. Like Frankfurt, the Swiss realized far too late that the business model was no longer viable after the financial crisis.
For far too long, both institutions afforded themselves a completely oversized investment bank that used up far too much capital, regularly caused expensive scandals and, above all, made their own bankers rich.
>>Read here: Insider – Credit Suisse has approached sovereign wealth funds for a capital injection
In 2013, the then dual leadership of Deutsche Bank, Anshu Jain and Jürgen Fitschen, committed themselves to cultural change. The bank bosses came up with six values – from integrity to customer orientation to partnership.
And because the number matched so well, they had the six principles printed on dice – cultural change as a game of chance. It took five more years, two more CEOs and extensive replacement of the first and second management levels to break the rule of the gamblers.
A concrete indication of a dysfunctional corporate culture in the financial sector is the balance of power between bankers and risk managers. The first group lusts after profits, the second fears losses.
If the bankers have the upper hand, sooner or later there will be trouble. That was the case at Deutsche Bank and it’s the same at Credit Suisse.
There is no other way to explain the accumulation of “accidents” among the Swiss, from the billions in damage caused by the collapse of the Archegos hedge fund to the careless sale of funds for the collapsed supply chain financier Greensill.
Only those who have the courage and discipline to forego risky profits in the short term will be able to work profitably in the long term. Precisely this virtue is a question of culture.
More: US jury finds Credit Suisse not guilty in foreign exchange scandal