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Credit Suisse CEO Thrilled To Hear Client Response To “We’ve Pleaded Guilty To Extensive Tax Fraud” Is “Yeah, And?”By Bess Levin
As you may have heard, yesterday Credit Suisse paid a $2.6 billion fine and pleaded guilty to doing the thing that Swiss banks were put on this earth to do– helping American clients avoid paying taxes by hiding their assets from the IRS. Now, some people might worry that copping to engaging in years of highly illegal activity would cause clients and counterparties to look at the bank differently. In fact, CEO Brady Dougan was one of those people, which caused him to get on the horn and conduct a small poll to see if anyone would have trouble doing business with Credit Suisse moving forward. The great news is that apparently no one gives a shit.
Credit Suisse Chief Executive Officer Brady Dougan said he doesn’t expect a guilty plea to a U.S. criminal charge will drive customers away from Switzerland’s second-biggest bank. “All the discussions with clients have actually been very reassuring,” Dougan said on a call with analysts and reporters today. “We continue to be hopeful and encouraged that there will be very little impact on business as we go forward.”
Another person for whom the guilty plea is water off a duck’s back is Lloyd Blankfein.
…early indications suggest that Credit Suisse’s counterparties won’t turn their backs on Switzerland’s second-biggest bank. Lloyd Blankfein, CEO of Goldman Sachs Group Inc., said on May 16 that “it becomes a very weighty decision for us to cut someone off, and we wouldn’t do it lightly.”
And while New York Life insurance is going to perform a series of tests on the bank to determine if it carries a gene for breaking the law, for now it’s sticking with the Swiss.
Some clients could react differently. New York Life Insurance Co., which manages more than $500 billion and is a client of Credit Suisse, will re-evaluate its relationship with the bank, said John Kim, the firm’s chief investment officer. The insurer will seek to “determine whether there’s something sort of systematic to that institution that caused them to behave poorly on one side of their business, and whether that extends to the investment banking side,” Kim said in an interview.