Credit Suisse Nightmares Aren’t Quite Over Yet

In just a matter of days, Credit Suisse Group AG went from an “excellent” start to 2021 to facing $5.5 billion of losses on a single investment-banking client — Archegos Capital — and a material hit from the implosion of its asset-management partner, the supply-chain finance firm Greensill Capital.

It was an extraordinary reversal. Efforts to shore up the firm’s balance sheet with a $2 billion capital raise, announced on Thursday, and a broad review of the bank’s risk-management failures should put out the raging fires. But Credit Suisse’s stumbles don’t just reflect a turn of events that caught it unawares. Deep weaknesses in oversight and a seemingly insatiable appetite for risk pervade the organization. Expect the rehabilitation and return to sustainable profitability to be a long and uncertain process.