A business more scared of losing a client than addressing the risks that client was bringing to the bank. That’s the central lesson of the Credit Suisse Group special committee report on Archegos Capital Management compiled by Paul, Weiss, Rifkind, Wharton & Garrison and released to the world today. It’s an expensive lesson: $5.5 billion to be precise.
“The Archegos-related losses sustained by CS are the result of a fundamental failure of management and controls in CS’s investment bank and, specifically, in its Prime Services business,” the report says.
“The business was focused on maximizing short-term profits and failed to rein in and, indeed, enabled Archegos’s voracious risk-taking.
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