The UK’s Financial Conduct Authority (FCA) has placed Credit Suisse on a watchlist of institutions requiring stringent supervision, reported FT.
The move is seen as the latest blow to the scandal-ridden Swiss investment bank, which flagged a likely second-quarter loss last week.
The FCA put Credit Suisse’s international division and UK operations on the watchlist after informing the bank last month that it was concerned that the bank had not taken necessary measures to enhance its culture, governance and risk controls, the report said.
In a letter sent to Credit Suisse last month, the watchdog urged the bank’s top management to submit documents regarding the steps it would take to put a stop to misconduct and enhance accountability.
The regulators also asked the bank to tackle “persistent” cultural issues, such as the absence of internal challenges to risky transactions.
The FCA had not yet seen “sufficient evidence of effective remediation,” it said in the letter which was seen by FT.
Credit Suisse was also asked by the regulators to take a number of actions, including a review in the second half of the year on the effectiveness of its international’s board, risk and audit committees.
Credit Suisse’s addition to the watchlist means the FCA has serious concerns about the firm, a person familiar with how the list operates told FT.
According to this person, the regulator adds only 20 or so institutions on the list at any one point out of the roughly 60,000 companies it regulates.
These institutions are closely monitored by senior officials at the FCA and are required to show progress and address issues that are of concern.
The FCA made the requests for the reviews after consulting with Swiss regulator Finma, the report said.
Finma did not comment on the news.
According to the letter, the regulators are also concerned about whether the bank adequately reported breaches of conduct rules for a number of years.
The letter also noted a lack of curiosity on the part of the bank to find the root causes of its failings.