Is it just our impression, or has Britain’s financial regulator finally adopted a hardman approach to policing the markets?
Maybe the FSA is just acting faster. Or then again, maybe it is just that firms in the spotlight are agreeing to quick settlements in the hope of getting bad Crunch-related news out of the way.
Either way, Credit Suisse has qualified for a “Stage 1″ discount in agreeing to settle at an early stage the FSA’s investigation into February’s discovery of CDO mis-marking and pricing errors, which led to a $2.65bn writedown just a week after the Swiss bank had revealed year-end figures.
But even after the discount CS has been hit with a £5.6m fine, which is big money in FSAland.
The specific breach by the bank was in poor supervision and inadequate systems and controls. The asset-backed positions in question were wrongly valued for about five months without CS taking the situation seriously.
In the event, the bank clearly came out with its hands up. From the FSA statement:
Credit Suisse commissioned a detailed review of the causes of the write down. This identified serious failures in the subsidiaries’ controls over the SCG and the operation and management of those controls and concluded that they were not effective. Senior management accepted the findings of the review and a comprehensive remedial programme is being undertaken.
This seems to have earned CS a 30 per cent discount according to the FSA’s early settlement schedule, although to qualify they have also agreed not to refer the matter to the regulator’s appeal process, the Financial Services and Markets Tribunal.
Related links:
Final notice - FSA
Credit Suisse reaches £5m FSA settlement - FT
