Credit Suisse needs to strengthen its board of directors after the bank disclosed almost $1bn of writedowns linked to illiquid positions, David Herro, chief investment officer at Harris Associates, told Finanz und Wirtschaft.
“Apparently there was a problem within the bank,” Herro told the Swiss newspaper in the interview published on Wednesday. “That shows that there’s probably a need to strengthen the board. Within a complicated financial institute such as Credit Suisse, there’s a need for people on the board that understand the business and make sure that there are no more such blunders.”
Bloomberg News reports that Credit Suisse posted a bigger-than-expected loss in the fourth quarter as a result of $633m in writedowns on mainly distressed credit and securitized pools of risky loans, which caught the top management off guard.
As of March 11, it was projecting further writedowns of $346m that, combined with a downturn in global markets that has depressed trading revenue, will probably wipe out first-quarter profit, CEO Tidjane Thiam said last month.
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