Risk Mismanagement and Collapse: An Analysis of Credit Suisse's Downfall

Yunzhi Lin

doi:10.47297/wspdecWSP2515-797316.20250904

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Risk Mismanagement and Collapse: An Analysis of Credit Suisse's Downfall

Volume 9, Issue 4

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Risk Mismanagement and Collapse: An Analysis of Credit Suisse's Downfall
Risk Mismanagement and Collapse: An Analysis of Credit Suisse's Downfall
The Australian National University (ANU), Canberra, ACT 2601, Australia
Vol. 9, Issue 4, Pages: 85-87(2025)
Published：21 April 2025
DOI：10.47297/wspdecWSP2515-797316.20250904
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Lin Yunzhi.Risk Mismanagement and Collapse: An Analysis of Credit Suisse's Downfall[J].Development Economics of China,2025,09(04):85-87.
DOI：

Lin Yunzhi.Risk Mismanagement and Collapse: An Analysis of Credit Suisse's Downfall[J].Development Economics of China,2025,09(04):85-87. DOI： 10.47297/wspdecWSP2515-797316.20250904.

摘要

Abstract

This study examines the collapse of Credit Suisse

a century-old global financial institution

and its implications for banking stability. Through a comprehensive analysis

we identify three core vulnerabilities that contributed to its downfall: reputational damage from repeated scandals

capital erosion due to excessive risk-taking and high operational costs

and strategic mismanagement characterized by erratic decision-making and inadequate risk controls. These weaknesses

compounded by the volatile post-pandemic financial landscape and regulatory gaps

accelerated the bank's demise. We delve into the weaknesses of Credit Suisse that undermined its solvency position

including a tarnished reputation

capital issues

and poor strategic management. Additionally

we explore the current financial environment and its impact on the banking sector. Finally

the article offers targeted recommendations for both banks and regulators to enhance resilience and prevent similar future failures.

关键词

Keywords

references

Bhattacharya , Arijit , and R. R. Reddy . 2022 . " Credit Suisse-Greensill Saga: A Case of Risk Management Failure ." Global Business Review (August) . https://doi.org/10.1177/09721509221117369 https://doi.org/10.1177/09721509221117369 .

Bouri , Elie , Matteo Foglia , and Ramzi Nekhili . 2023 . " European Bank Credit Risk Transmission During the Credit Suisse Collapse." Finance Research Letters 58 (Part B) : 104452 .

Cai , Simiao . 2024 . Implications of the Credit Suisse Banking Crisis for Systemically Important Banks in China . Master's thesis, Hebei Finance University .

Englundh J . 2023. " Credit Suisse's Demise: A Timeline of Scandal and Failures ." Morningstar. Accessed October 11 , 2024 . https://www.morningstar.com.au/insights/markets/233261/credit-suisses-demise-a-timeline-of-scandal-and-failures https://www.morningstar.com.au/insights/markets/233261/credit-suisses-demise-a-timeline-of-scandal-and-failures .

FINMA . 2023 . " FINMA Publishes Report and Lessons Learned from the Credit Suisse Crisis." FINMA . Accessed October 11 , 2024 . https://www.finma.ch/en/news/2023/12/20231219-mm-cs-bericht/ https://www.finma.ch/en/news/2023/12/20231219-mm-cs-bericht/ .

Reiff N . 2023. " What Happened at Credit Suisse, and Why Did It Collapse?" Investopedia . Accessed October 11 , 2024 . https://www.investopedia.com/what-happened-at-credit-suisse-and-why-did-it-collapse-7369825 https://www.investopedia.com/what-happened-at-credit-suisse-and-why-did-it-collapse-7369825 .

Stuart R . 2023. " Why Did Credit Suisse Fail and What Does It Mean for Banking Regulation?" Economics Observatory . Accessed October 11 , 2024 . https://www.economicsobservatory.com/why-did-credit-suisse-fail-and-what-does-it-mean-for-banking-regulation https://www.economicsobservatory.com/why-did-credit-suisse-fail-and-what-does-it-mean-for-banking-regulation

Wu , Qin . 2025 . " The Causes and Regulatory Implications of Credit Suisse's Collapse." Agricultural Development and Finance . Published January 26 , 2025 .

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