Credit Suisse hires Goldman Sachs executives as head of risk management

Financial Services Update

Credit Suisse has hired an executive from Goldman Sachs as its chief risk officer as the Swiss bank has set out to strengthen its control After a series of crises.

David Wildermuth, who has been a Goldman Sachs deputy risk officer since 2015, will move from New York to Zurich in February 2022 to take up a new position.

In recent years, Credit Suisse has been hit by a series of scandals, and finally a double failure occurred in the spring around the professional financial company Greensill Capital and the family office Archegos Capital. Both reveal serious weaknesses in bank risk management and culture.

The Swiss bank was forced to suspend investment of US$10 billion in Greenhill-related debt in March. Just a few weeks later, after the collapse of Archegos, it lost $5.5 billion, Archegos being a client of the bank’s main brokerage department.

In response, Credit Suisse fired several senior and middle managers, including Lara Warner, who had Supervise risk management And compliance. Andreas Gotschlin After several major shareholders expressed that they would vote against his re-election, he resigned as the head of the risk committee of the Credit Suisse board of directors in April.

Joachim Oechslin served as the chief risk officer of Credit Suisse until 2019. He temporarily took over the responsibility of risk management when Warner left in April.

After Wildermuth joins, Oechslin will resume his role as a strategic advisor to CEO Thomas Gottstein.

In a statement on Tuesday, the new chairman, António Horta-Osório, stated that Wildemus would “help shape the group’s enhanced risk management framework, which is what the bank is currently working on. An important part of the strategic adjustments carried out”.

As a veteran who has worked at Goldman Sachs for 24 years, Wildermuth has spent most of his career in risk management and was appointed as a partner in 2010. In contrast, Warner joined Credit Suisse as an equity analyst and was promoted to her risk and compliance position after serving as a risk and compliance officer. Chief Financial Officer of Group Investment Bank.

“We chose him because he has extensive experience in credit and risk. [and] Work in a leading financial institution,” said a person familiar with the recruitment process. “This shows that we can still hire top talent from our competitors. “

Another added: “The introduction of such a high-level appointment is our clear intention to strengthen our risk management defenses.”

Goldman Sachs also provided prime brokerage services to Archegos, but unlike Credit Suisse, Goldman Sachs managed to escape the impact relatively unscathed. The U.S. bank attributes its better results to its risk control and the fact that it holds enough margin to trade positions without loss.

Goldman Sachs was also one of the first banks to release positions related to Archegos, and the Credit Suisse broker Move much slower.

Credit Suisse announced this month that it would poach another Goldman Sachs executive, Joanne Hannaford (Joanne Hannaford) as chief technology and operations officer. Both Wildermuth and Hannaford will join Credit Suisse’s executive board and report to Gottstein.

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