David Wildermuth has been appointed as Credit Suisse new chief risk officer. The Goldman Sachs alumnus will also join the executive committee, the two-veiled bank announced Tuesday.
According to Gottstein, Wildermuth’s appointment reflects the bank’s commitment to risk management in light of his 34 years in financial services. A half-year earnings call for the company is scheduled two days after this announcement.
The new director will succeed Joachim Oechslin, who will serve as interim director until Wilddermuth takes up the position. Mr. Oechslin will then concentrate on his role as CEO advisor.
Focus on risk management
New President Antonio Horta-Osorio recently emphasized the importance of risk management. After failing with both Archegos, a hedge fund, and Greensill, a factoring company, the management had warned in the spring that it would reduce risk-taking in its investment bank, particularly in the prime brokerage business with hedge funds.
This is a challenging time for the bank, which has been singled out by Moody’s due to a higher than expected risk appetite, a deficit in internal risk awareness, and control failures. In mid-July, the New York-based rating agency downgraded some of Credit Suisse’s bonds.
Moody’s also warned that these cases may expose the bank to legal action by clients who lost money in the SCFF and Archegos funds. Further losses cannot be ruled out in the second half of the year.
The downgrades follow the Greensill and Archegos cases, which resulted in heavy losses for the bank. In the first quarter, the bank posted a pretax loss of 757 million francs after posting a positive result of 1.2 billion a year earlier.
At around 9:45 a.m. on the Swiss stock exchange, Credit Suisse shares were down a sharp 1.3% to 9.3 francs, while the leading SMI index was down 0.87%.