His balance sheet is impressive: Markus Diethelm, 64 years old, until recently chief lawyer at UBS, the largest bank in Switzerland. Together with the recently retired UBS President Axel Weber and former CEO Sergio Ermotti, he made sure that the bank was able to put most of the problems and scandals of the past decades behind it.
Now Diethelm, a lawyer trained in Zurich and Stanford, is to bring his reputation and experience to the troubled Credit Suisse. Several newspapers had about it, citing insiders reported. On Wednesday morning, the bank put an end to the rumors and announced the change of personnel – along with other changes at senior management level: Therefore Markus Diethelm will start as General Counsel on July 1st.
Markus Diethelm becomes chief legal officer at Credit Suisse.
(Photo: THOMAS SAMSON/AFP)
Credit Suisse, the second-largest bank in the Swiss financial center, can really use such a group lawyer right now. Since 2019, the institute has not gotten out of the negative headlines. The series of scandals began with the shadowing affair surrounding top banker Iqbal Khan, as a result of which CEO Tidjane Thiam submitted his resignation at the beginning of 2020. In the spring of 2021, when Thiam’s successor Thomas Gottstein was already running the bank, Greensill Capital, a British-Australian financial conglomerate specializing in supply chain financing, went bankrupt. The bankruptcy hit the bank hard. Shortly thereafter, the US hedge fund Archegos Capital, to which Credit Suisse had lent enormous sums, collapsed. No other bank linked to Archegos suffered such high losses as the Swiss number two: more than five billion dollars.
Finally, in February, the SZ published its “Suisse Secrets” research and revealed that Credit Suisse had accepted corrupt autocrats, suspected war criminals, drug dealers and other criminals as clients for decades. The bench denied the allegations and stressed that the majority of these accounts have long been closed. Nevertheless, the “Suisse Secrets” reinforced the impression that the money house was struggling with systemic problems.
Make the misery complete the latest figures, also released on Wednesday: In the first quarter of 2022, Credit Suisse posted a loss of CHF 273 million. The full year 2021 also ended in the red due to the Archegos bankruptcy.
The appointment of Markus Diethelm now seems like an attempt at liberation. However, the bank plays down the personnel and refers to the more than ten-year tenure of Diethelm’s predecessor, Romeo Cerutti: He asked to retire. Credit Suisse already had the weekend NZZ on Sunday informed that the management “regularly deals with the issue of succession planning and appointments for certain senior positions” as part of its reform strategy – in other words: everything is quite normal.
Diethelm’s recipe are comparisons
Nevertheless, Diethelm’s start at Credit Suisse can be interpreted as a break. Under Cerutti, the bank was more likely to go into confrontation in court. Diethelm’s recipes, on the other hand, are comparisons. In doing so, he significantly reduced the amount of fines that UBS – like many other banks – had to pay since the 2008 financial crisis.
For example, in the tax dispute with the United States, when UBS provided customer data to the US Department of Justice and thereby paid a comparatively low fine of $780 million. Credit Suisse, on the other hand, had to transfer a whopping $2.6 billion to the United States in 2014. In the scandal surrounding the illegal agreements on the Libor reference interest rate, thanks to Diethelm, UBS escaped punishment, at least in Europe, because it had offered itself to Brussels as a key witness. Only in the tax dispute with France did Diethelm confidently go to court. The proceedings are not over yet, but at least the UBS chief lawyer was able to significantly reduce the record fine of 4.5 billion euros imposed in the first instance in the second instance.