Two Blowups Have Credit Suisse Paying the Price of Risky Business

On the evening of Feb. 6, 2020, Thomas Gottstein gathered his top lieutenants at his Zurich office to let them in on his secret: In a few hours, he would be named chief executive officer of Credit Suisse Group AG. They shared a group hug, and the new boss said he was going to buy some more stock in the bank.

Gottstein’s tenure since then has seen the institution shaken to its core. Credit Suisse was involved in two spectacular messes in the course of a few weeks in March: the fall of supply chain finance company Greensill Capital and the massive trading losses of Archegos Capital Management. The bank remains financially solid, but has been forced to reassess its risk and shore up its capital defenses by raising $2 billion from investors. Its shares have tumbled since Gottstein took over, making it one of the few losers among financial stocks lately.