A decade ago, the venerable and now defunct bank Credit Suisse brought in a new chief executive, Tidjane Thiam, who naturally bought himself a house on Zurich’s “Gold Coast.” A few months later, Thiam found that he had a new neighbor — his own star underling, Iqbal Khan. Khan, too, had decided to buy in the prestigious precinct, with windows overlooking his boss’s yard — and promptly embarked on a two-year course of cacophonous renovations. The two, inevitably, fell out.
Credit Suisse cut Khan loose; he found work at UBS, Switzerland’s other big investment bank. Then things got more dramatic. Credit Suisse, it seemed, had Khan followed, which Khan discovered when he noticed a car trailing him to the dry cleaner’s. Khan confronted the investigator; there was a scandal. One of the private investigators killed himself, a senior executive got fired and Thiam eventually resigned.
This story, capably summarized by the U.K.-based financial journalist Duncan Mavin in “Meltdown,” nicely encapsulates the larger Credit Suisse narrative: Full of petty, pointless squabbles, generally unfolding on the edge of legality, it’s not exactly an epic of corporate hubris, nor quite a morality play of corporate greed, but a procession of lazy grifts and dumb mistakes, repeated for decades.
To the extent that there is an original sin in this story, it is the Swiss bank secrecy laws that made Credit Suisse a global destination for shady money. As a neutral country, Switzerland first began attracting international capital — to the vexation of other governments — during World War I. Seeing an opportunity to keep the money flowing, the Swiss, in terms largely written by bankers themselves, enshrined the tradition of discretion into law in 1934.
That secrecy winds up serving two purposes: On the one hand, it provides for an endless stream of clients seeking to shelter their money from taxes and other inconvenient inquiries. On the other, it places a veil over the activities of Swiss banks, letting them run roughshod over their own clients’ interests. Thus it is that after World War II the heirs of Jewish clients watched their money drain away from fees as Credit Suisse demanded death certificates for people who had perished in concentration camps.
All the while, Credit Suisse was building up a robust business servicing whatever extralegal financial needs might arise at any given moment, moving beyond tax avoidance to the avoidance of U.S. financial sanctions. These services were, as Mavin deftly characterizes it, not an anomaly but rather a “core business” for Credit Suisse.
Overall it’s an impressive dossier of sleaze, although Mavin sometimes understates the depth of the rot. While the chapter on Credit Suisse’s theft from Jewish accounts ends with the $1.2 billion settlement that UBS and Credit Suisse signed, it skips over the bank’s years of efforts to avoid actually paying out on that settlement.
The story of Credit Suisse ended ignominiously in 2023. Shaken by bad bets and facing a run on its money from worried depositors, Credit Suisse was pushed into a shotgun marriage with rival UBS by Swiss authorities. The final blowup was much the same as that of any other bank: It came down to lending money to big clients who couldn’t pay it back.
Is Credit Suisse’s long history of corruption to blame for that fizzling end? It isn’t entirely clear. There is obviously ineptitude here (one C.E.O. brought over from the United States avers that he can’t help telling his board of directors they were stupid because “they are stupid”). But you can compile similar stories about many other banks, some extinct, others still standing.
Many of those (Lehman Brothers, Drexel Burnham Lambert) went out with more exciting bangs than Credit Suisse. In the end, the gravitational center of the financial world moved to the U.S., and Credit Suisse had to get bigger and more American to survive. It tried, and failed, and was finally subsumed into UBS.
It’s hard to work up either sympathy or anger about Credit Suisse. Two years after the bank’s demise, it is not clear what audience there might be for books like this. Somewhere, no doubt, grizzled former moneymen are telling the old tales of all the great banks and how they fought, toasting to the names long gone — Dillon, Read and Salomon Brothers and Barings and the rest — or reciting their misdeeds.
Most of the rest of us, though, have stopped seeking moral lessons or rousing adventures in stories of high finance. Banking often makes for a bad spectator sport. When the money is gone, only the dull parts remain.
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