For Want of a Nail ……
April 6 2021
First – a definition.
“Lessons learnt: lessons which are never learnt by those who need to learn them.”
Today we learn that Credit Suisse has lost 4.4 billion Swiss francs following Archegos’ failure. This comes on top of its problems with Greensill, now in administration. This will result in a first quarter loss of ca. 900 million Swiss francs and has already led to the departure of its Head of Investment Banking and Chief Risk Officer.
A world of pain awaits.
– There may be more departures. Others will be nervous about the scrutiny now being given to past decisions.
– There will be internal investigators, internal audit, external investigators, lawyers, accountants and regulators crawling over thousands of internal documents.
– The remediation costs will be horrible.
– Clients whose money was invested in these ventures will need to be pacified if legal action is to be avoided.
– Enforcement action from regulators may follow. Scrutiny by them certainly will.
– It will be urgently looking to see where else it has made similar mistakes.
And a number of other banks also involved with these two entities will be undergoing something similar, though with less publicity. They have either had – or will have in due course – their turn in the sun.
Still, it’s not all bad news. The Chief Executive has said that “Serious lessons will be learnt.”
Would it be unkind and/or tactless to say that if it had learnt any of the serious lessons that were available to be learnt from the many similar disasters over, ooh I don’t know, the last couple of decades or so, they might not have had to learn them now and that £3.4 billion would still be in the bank?
It would. Oh well. Never mind. Let me update the definition instead.
“Lessons learnt: lessons which are never learnt by those who need to learn them, until it is too late.“