Head Of Swiss Bank That Avoided Bailout Money Now In Hot Water
As head of the Swiss bank Credit Suisse, CEO Brady Dougan was able to withstand the financial crisis without having to accept government bailout money. But now the bank executive could be ousted from his position as the bank searchers for alternatives to raise capital.
Credit Suisse is considering shoring up capital by issuing 6 billion Swiss francs ($6.26 billion dollars) of convertible bonds or CoCos ahead of schedule, CNBC reported. Dougan is said to be under pressure after the Swiss National Bank said Credit Suisse is not boosting its capital quickly enough, CNBC reported.
Though Dougan allowed Credit Suisse to avoid taking government aid, the bank still saw its long term debt rating drop three notches from rating agency Moody’s.
Dougan’s standing at the bank is now uncertain. A Swiss newspaper reported that the bank’s board met Friday to discuss possible successors, but in a statement later that day the board publicly backed Dougan.
“The board is comfortable with the progress that has been made toward meeting the Basel 3 capital requirements,” the directors said, adding that they are confident that Dougan’s plans will exceed the capital requirements.
Credit Suisse, Switzerland’s second-largest bank by assets, fell 11 percent in June and reached its lowest level since 1992, Bloomberg reported. The urging of the Swiss National Bank that Credit Suisse boost capital came as a surprise to many and a blow to the 52-year-old Dougan, a U.S. citizen.
Christopher Wheeler, a London-based bank analyst, told Bloomberg that Credit Suisse is likely to rally around Dougan and his plans.
“(Credit Suisse is) going into battle with the Swiss National Bank because they feel unfairly treated,” Wheeler said. “They have a glide path to increasing capital based on retaining earnings but the SNB is quite aggressive in wanting them to move earlier.”