UBS faces penalty worth $387m for Credit Suisse misconduct
"The action against UBS is being taken in conjunction with the Swiss Financial Market Supervisory Authority," says Fed
July 25, 2023
WASHINGTON: The Swiss banking giant UBS was fined on Monday a total of $387 million for misconduct by its recently-acquired subsidiary, Credit Suisse, announced the US Federal Reserve.
Swiss regulators pushed UBS to take over its former rival Credit Suisse earlier this year amid a banking crisis spurred by the collapse of US regional lender Silicon Valley Bank.
In a statement, the Fed announced that UBS was fined a total of $387 million by the Fed and the Bank of England over Credit Suisse’s failure "to adequately manage" the risk posed by the US family investment fund Archegos, despite repeated warnings.
The dramatic implosion of the family hedge fund run by Bill Hwang cost Credit Suisse around $5.5 billion in losses, AFP reported.
The Fed said "the misconduct involved Credit Suisse's unsafe and unsound counterparty credit risk management practices" with Archegos, and announced a consent order and a fine for UBS worth $268.5 million.
The Bank of England's Prudential Regulation Authority would also be fining Credit Suisse's new owner, the Fed announced, adding that the sum total of fines levied by the two regulators would be approximately $387 million.
The action against UBS is being taken in conjunction with the Swiss Financial Market Supervisory Authority, the Fed said.
