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Credit Suisse Hires Goldman Partner for Risk After Blowups

This content was published on July 27, 2021 - 07:37

(Bloomberg) -- Credit Suisse Group AG hired David Wildermuth from Goldman Sachs Group Inc. to become chief risk officer as the Swiss bank shakes up internal oversight in the wake of multibillion-dollar scandals.

Wildermuth, deputy chief risk officer at Goldman, will join in February and report directly to Chief Executive Officer Thomas Gottstein, the bank said in a statement Tuesday, confirming an earlier Bloomberg News story. He succeeds Lara Warner, who stepped down as chief risk and compliance officer after the firm lost about $5.5 billion on the collapse of client Archegos Capital Management.

Credit Suisse has been shaking up senior ranks and scrutinizing businesses as it tries to rebuild its reputation after dealings with Archegos and Greensill Capital ended in scandals. Chairman Antonio Horta-Osorio, vowing reforms, has said the twin hits went beyond any he’d lived through over three-and-a-half decades working at banks.

Wildermuth “will help shape the group’s enhanced risk management framework, an essential part of the bank’s strategic realignment currently underway,” Horta-Osorio said in the statement.

Credit Suisse was hit harder than any other bank by Archegos, which collapsed just days after the Swiss bank had to freeze a $10 billion group of funds it had run with Greensill Capital. The twin hits marked the culmination of a series of missteps that had raised concerns about the bank’s controls, risk management and corporate culture.

Gottstein, who took over from Tidjane Thiam last year in the wake of a spying scandal, had initially backed Warner, a Thiam protege who recalibrated the bank’s approach to risk. In his first reshuffle as CEO, he even elevated her last year to head both risk and compliance.

Gottstein was forced to change course in April, when Warner was among several top executives to leave in a shakeup. Horta-Osorio, who was elected chairman that month, has pledged a thorough review of the bank’s businesses. Credit Suisse has since cut back risk, including in the prime business that suffered the Archegos losses, and this month settled a dispute with the former wealth executive at the center of the spying scandal.

Wildermuth won’t assume the role of chief compliance officer, which the bank separated from the CRO function after Warner’s departure, and which is still being overseen in the interim by Thomas Grotzer. Joachim Oechslin, the bank’s interim CRO, will continue to serve in that role until Wildermuth takes over.

A graduate of Dartmouth College, Wildermuth joined Goldman Sachs in 1997 and was named managing director in 2001 and partner in 2010. Goldman was one of the few major prime brokers to Bill Hwang’s Archegos that escaped from the blowup of the family office.

In trying to move past the Archegos debacle, Credit Suisse is turning to Goldman Sachs for the second time this month. Earlier in July, the Swiss lender tapped another Goldman veteran, Joanne Hannaford, as its new chief technology and operations officer and elevated her to the executive board.

(Adds background on risk management failures from fifth paragraph.)

©2021 Bloomberg L.P.

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