It is the biggest fine ever recorded by the bank’s Prudential Regulation Authority (PRA), and comes at a 30% discount from the £124.4m which would have applied had the firms not agreed to resolve the issues. It also comes on top of Credit Suisse agreeing to pay $269m (£210m) to the US Federal Reserve. 

The PRA fine relates to Credit Suisse International (CSI) and Credit Suisse Securities (Europe) Ltd exposure to private investment firm Archegos Capital Management between 1 January 2020 and 31 March 2021. 

This pre-dates the recent Credit Suisse buy-out by rival UBS which came amid fears the firm’s collapse could trigger a new banking crisis and so the PRA’s investigation does not relate to this acquisition, and solely concerns the actions of the Credit Suisse firms.

The PRA said there were “significant failures in risk management and governance” relating to the way the firms provided prime brokerage services and entered into equity total return swaps with Archegos.

When Archegos defaulted in March 2021, it resulted in $5.1bn (£4bn) of losses to the firms. The PRA said this led to “significant financial and reputational damage” for Credit Suisse. 

The fine is the only time a PRA investigation has found a firm in breach of all four of its fundamental rules:

1. A firm to conduct business with due skill, care and diligence
2. A firm must act in a prudent manner
3. A firm must have effective risk strategies and risk management systems
4. A firm must organise and control its affairs responsibly and effectively.

It said Credit Suisse’s risk management fell “well below” the standards required and there was an “unsound risk culture” at the firms. It also said the firms failed to learn from past similar experiences and had insufficiently addressed concerns previously raised.

‘Major threat to the safety and soundness of the firm’

Sam Woods, deputy governor for prudential regulation and chief executive officer of the PRA, said: “Credit Suisse’s failures to manage risks effectively were extremely serious, and created a major threat to the safety and soundness of the firm. The seriousness and widespread nature of those failures has led to today’s fine, which is the largest ever imposed by the PRA.”

A statement from the UBS Group, said: “UBS will implement its operational and risk management discipline and its culture across the combined organisation.

“It has already begun implementing its risk framework, including actions addressing these regulatory findings, across Credit Suisse. UBS intends to resolve Credit Suisse’s outstanding litigation and regulatory matters in the best interest of its stakeholders, including investors, clients and employees.”