The US Federal Reserve (Fed) has fined Zurich-based bank UBS $268.5 million for risk management failures in the transactions of Credit Suisse, which it acquired in June, with Archegos Capital Management.
In the statement made by the Fed, it was stated that in 2021, Credit Suisse lost approximately $ 5.5 billion due to the default of Archegos, an investment fund.
Pointing out that Credit Suisse was unable to adequately manage the risk posed by Archegos despite repeated warnings, the Fed Board of Directors requested Credit Suisse to improve its counterparty credit risk management practices and address long-standing shortcomings in other risk management programs in the bank’s US operations.
In the statement, it was reported that the Fed fined UBS $ 268.5 million in this context.
Pointing out that the action of the Fed Board of Directors was taken by the measures of the Swiss Financial Market Supervisory Authority and the Prudential Regulatory Authority (PRA) of the Bank of England, it was noted that the sum of the penalties announced by the Board and the PRA was approximately 387 million dollars.
sentenced in England
In a statement from the Bank of England (BoE), it was reported that the PRA fined Credit Suisse £87m for significant failures in risk management related to Archegos.Pointing out that the amount in question is the highest fine issued by the PRA, the statement emphasized that this is the only time a PRA sanctions investigation has detected violations of the four basic PRA rules.
UBS acquired Credit Suisse
After the banking crisis that started in the USA in March, there was a Credit Suisse panic in Europe. The developments after the Saudi National Bank, the biggest partner of Credit Suisse bank, announced that it would not increase its capital, dragged the bank to the brink of bankruptcy.Switzerland’s largest bank, UBS, announced that it would buy 167-year-old Credit Suisse for 3 billion francs, with the government’s liquidity support of 200 billion francs.
Zurich-based UBS completed its state-aided acquisition of rival Credit Suisse in June.