Credit Suisse has initiated an internal investigation as it came under regulators’ lens following the insolvency of British financial services firm Greensill Capital.
According to a Reuters report, Credit Suisse was a key source of funding for Greensill Capital.
The Swiss bank was associated with selling around $10bn worth of Greensill-created securities through its asset management unit.
Credit Suisse has hired external firms to deal with regulators’ queries, the news agency further reported quoting sources familiar with the matter.
Additionally, three Credit Suisse employees including the head of its European asset management arm were replaced.
Last week, the bank froze all funds linked with Greensill after the securities lost insurance coverage.
The sources further told Reuters that Credit Suisse has appointed external firms to accelerate the reimbursement process that will provide liquidation proceeds from the funds to investors.
To date, nearly $3.05bn worth of payments were made with further payments will be made ‘as soon as practicable’.
Notably, many assets in the funds were insured in order to protect investors’ money in case of default.
Japan’s Tokio Marine, which inherited a significant segment of the policies when it purchased Insurance Australia Group, has already initiated an investigation to determine the validity of the policies.
These policies may be directly linked with Credit Suisse funds.
However, Credit Suisse declined to comment on this matter when approached by Reuters.
This comes at a time when the Swiss Bank is emerging from a prolonged legal dispute that impacted its Q4 2020 results.