The Credit Suisse soap opera continues. After an explosion of the price of its Credit Default Swap (CDS) at the beginning of the month and a recovery plan of 3 billion Swiss francs to buy back its debts, the 2nd Swiss bank has been hit by yet another money laundering case. To avoid prosecution in France, Credit Suisse will pay 238 million euros to the French government.
2 billion Swiss francs hidden by Credit Suisse from French tax authorities
The news was confirmed on Monday 24 October by the French authorities. Credit Suisse, which has lost more than 50% of its stock market value in one year, will pay 115 million euros in damages and 123 million euros in fines as part of a judicial agreement of public interest to the French Parquet National Financier (PNF).
Credit Suisse share price evolution since December 2021
Despite a financing plan expected at the end of October to revive its activities, the bank does not seem to be at the end of its tether.
After paying 475 million to the US and UK financial authorities last year to settle lawsuits related to hidden credits granted to two state-owned companies in Mozambique, it is in France that the Swiss bank is now trying to settle its accounts.
In 2016, a financial investigation was opened for money laundering and illegal canvassing of clients. The file put together by the French tax authorities proved that more than 5,000 French clients had undeclared accounts with Crédit Suisse, the equivalent of €2 billion hidden.
Stéphane Noël, president of the French tax tribunal, added: “
Credit Suisse did not send any account statements. The canvassing did not comply with French legislation, the salesmen travelled in France, in total discretion. They identified prospects with visits to hotels, restaurants, never in the official premises of the French establishment. “
Credit Suisse admits no responsibility
As the bank struggles to regain the confidence of its investors, a press release was issued on Monday confirming the French authorities’ announcement. However, in this memo, the bank denies any responsibility.
This settlement is in no way an admission of guilt. The bank is pleased to resolve this dispute, which marks an important step in the proactive resolution of Credit Suisse’s legal affairs. “
238 million paid to the French tax authorities will allow the Swiss institution to put an end to this investigation and thus avoid a trial in France.
If the bank, capitalised at nearly 10 billion dollars at the time of writing, remains a historic and essential institution for the Swiss authorities, this episode highlights the delay of traditional finance in terms of transparency and reliability.
So traditional finance will soon be optimized by blockchain technology?
Despite this, some players are leading the way and unveiling solutions to address these types of issues. JP Morgan and Visa, for example, recently announced that they are developing a joint project based on blockchain technology to facilitate cross-border interbank transfers.
If this project sees the light of day in 2023, it would, according to Forbes, save $118 billion a year – the amount lost to incorrect banking information every year.
Ultimately, after the economic crisis of 2008, the cryptocurrency industry rose as an alternative to the woes of traditional finance. While the crypto-asset market is still young, it offers concrete solutions that complement the current banking system.
While some still see this industry as speculative and unstable, its development over the past 15 years with public, traceable and universally accessible blockchain networks, underlines that a financial system more suited to our needs is yet to be built.
