Credit Suisse

Credit Suisse was founded in Zurich in 1856, as Schweizerische Kreditanstalt, by the railway magnate and politician Alfred Escher, who wanted a Swiss institution to fund Swiss industrialization instead of leaving the country’s railways dependent on French banks. It worked: within a year the new bank drew roughly a quarter of its revenue from financing the Swiss Northeastern Railway, and by 1871 it was already the largest bank in Switzerland. It went on to help finance the Gotthard railway, completed in 1882, and to help build the Swiss currency and monetary system. For more than a century it was one of Switzerland’s “Big Three” banks, alongside UBS and Swiss Bank Corporation, until the latter two merged in 1998.

By 2007 Credit Suisse’s balance sheet had grown to roughly $1 trillion, and regulators later designated it a Global Systemically Important Bank — one of about 30 institutions worldwide whose failure was judged capable of triggering a global financial crisis, a category invented specifically because of what happened to Lehman Brothers in 2008. Credit Suisse spent its last years proving the designation’s point in reverse: a $5.5 billion loss on the collapse of Archegos Capital in 2021, roughly $10 billion in client money tied up in the collapse of Greensill Capital the same year, a 2022 criminal conviction for failing to prevent money laundering for a Bulgarian cocaine-trafficking ring (later overturned on appeal after the accused employee died, itself now under further appeal), and a steady drumbeat of downgrades and leadership churn. In the fourth quarter of 2022 alone, clients pulled CHF 110.5 billion out of the bank on rumors about its solvency.

The end came fast once it came. In March 2023, after its largest shareholder ruled out further investment, Credit Suisse’s share price collapsed within days. Over the weekend of 18-19 March, the Swiss government, the financial regulator FINMA, and the Swiss National Bank forced an emergency merger with UBS to stop the panic from spreading through the global banking system — the first time a G-SIB had failed and been rescued since the post-2008 “too big to fail” rules were written. About $17 billion in the bank’s AT1 bonds were written to zero, while shareholders kept some value, an inversion of the usual order that bondholders are still fighting in court. UBS’s takeover became legally final on 31 May 2024, when Credit Suisse AG was struck from Zurich’s commercial register and stopped existing as a legal entity; UBS has said the Credit Suisse brand itself will be phased out entirely. A bank built to make sure Switzerland didn’t have to depend on foreign capital ended up folded into its last domestic rival, 167 years and one very bad decade later.