Kareem Serageldin, the ex-global head of Credit Suisse’s CDO business charged in a bonus-boosting fraud tied to a $5.35 billion trading book, plans to fight extradition to the U.S. until he reaches a plea deal. Serageldin’s lawyer told a London court yesterday that his client’s arrest this week outside the U.S. Embassy was a result of “miscommunication.” Ben Brandon said Serageldin was negotiating a plea bargain with U.S. prosecutors before the arrest. He was released on a 150,000-pound security ($243,000) until a Nov. 28 court hearing. [Bloomberg]
This Is A Clip Of A Credit Suisse Salesman* Getting Into A Physical Altercation Over A Cab, Being Aggressively Choked Out, And Ultimately Emerging VICTORIOUSBy Bess Levin
*Sources familiar with the rumble, etc.
Things could be better in Europe. Read more »
Cuts were said to have gone down at the House of Dougan this week. Read more »
In an unusual move, the board of Credit Suisse Group AG Friday issued a statement to back Chief Executive Brady Dougan, saying it is confident management’s plans to bolster capital will ensure Switzerland’s No. 2 bank meets and exceeds regulatory requirements. Mr. Dougan’s problems have been building in recent days. Last week, he was caught up in an unusual public spat with Switzerland’s central bank over whether Credit Suisse’s capital cushion is adequate. Meanwhile, the Swiss bank’s stock has fallen sharply and some of its bankers are grumbling about Mr. Dougan’s performance as chief executive. The questions about Mr. Dougan have intensified in recent days and represent an unwelcome distraction for the bank, which has prided itself on avoiding much of the turmoil that has befallen its larger rival, UBS AG. The board has now moved to quell any speculation about Mr. Dougan’s future at the bank, saying it was comfortable with the progress that has been made toward meeting the Basel III capital requirements. [WSJ]
The SNB is therefore of the view that both big banks should further expand their loss-absorbing capital. For UBS, this implies a continuation of its capital strengthening process; and for Credit Suisse, an acceleration of the process, with a marked increase during the current year. … For Credit Suisse, given the low starting point and the risks in the environment, it is essential that it already substantially expand its loss-absorbing capital base during the current year. Apart from the planned reduction of risk, these improvements can also be achieved in other ways, such as by suspending dividend payments, or even by raising capital on the market through share issuance.
This was unwelcome news, and the banks’ loss-absorbing capital absorbed some losses, with CS down 9.4% today. This may have come as some surprise to the SNB, which thought that its suggestions were actually shareholder-friendly, saying that it “is also in the banks’ own interest to strengthen their resilience, as a sound capital base constitutes a competitive advantage in the core business of wealth management.” JPMorgan’s Kian Abouhossein agrees, arguing in a report today that CS will improve capital by shrinking assets, mainly in the investment bank, and that: Read more »