Fed fines UBS $268.5 million

In the Fed statement, it was indicated that in 2021, Credit Suisse lost approximately 5.5 billion dollars due to the default of Archegos, an investment fund.

Noting that Credit Suisse failed to adequately manage the risk posed by Archegos despite repeated warnings, the Fed Board asked Credit Suisse to improve its counterparty credit risk management practices and address longstanding deficiencies in other risk management programs in the bank’s US operations.

$268.5 million in fines

In the statement, it was reported that the Fed fined UBS $268.5 million in this context.

Noting that the Fed Board’s action was taken over by actions by the Swiss Financial Market Supervisory Authority and the Bank of England’s Prudential Regulation Authority (PRA), it was noted that the sum of the sanctions announced by the Board and the PRA was approximately $387 million.

ENGLAND ALSO PUNISHED

In a Bank of England (BoE) statement, the PRA reportedly fined Credit Suisse £87 million for material risk management failures related to Archegos.

Noting that the amount in question is the highest fine issued by the PRA, the statement emphasized that this is the only time that a PRA sanctions investigation has found violations of the PRA’s four basic rules.

UBS TAKES ON CREDIT SWITZERLAND

After the banking crisis that started in the US in March, there was a panic at Credit Suisse in Europe. Events after the Saudi National Bank, the largest partner of Credit Suisse bank, announced that it would not raise its capital, dragged the bank to the brink of bankruptcy.

Switzerland’s largest bank, UBS, announced it would buy 167-year-old Credit Suisse for 3 billion francs, with government liquidity support of 200 billion francs.

Zurich-based UBS completed the state-aided takeover of rival Credit Suisse in June. (AA)