Credit Suisse scandal shakes Zurich’s elite | Hacker News Reader

Credit Suisse scandal shakes Zurich’s elite

swissinfo.ch

191 pointskenneth86 comments

Matt Levine had written about it before in his excellent Money Stuff column on Bloomberg:

> > [Thiam] was hosting a new year’s drinks party.

> > Among his 60 or so guests were many locals from the Zurich suburb of Herrliberg, along with a clutch of top Credit Suisse executives and his new neighbors -- Iqbal Khan, the bank’s wealth-management chief, and his wife.

> > Before long, it all went wrong. A remark by Khan to Thiam’s partner set off a bitter feud between the two alpha males. The guest had insulted the state of the garden, according to a person who was there. Later, Thiam tapped Khan on the shoulder and asked for a word. The two went downstairs and argued before later resurfacing.

> “A bitter feud between the two alpha males” over the state of Thiam’s garden, I love it, investment banking is the best. For a while, some people thought that this scandal might even take down Thiam, and I can’t imagine a better reason for losing the high-profile and lucrative top job at a global bank than “I had to defend the honor of my garden.”

https://www.bloomberg.com/opinion/newsletters/2019-09-23/mon...

https://www.bloomberg.com/opinion/articles/2019-10-02/the-tr...

Matt Levine is the man.

Credit Suisse's website should display a counter with the heading: "Days since last Credit Suisse scandal".

> the contractor who acted as a middle man between Credit Suisse and a private investigation firm took his own life.

Damn. I wonder whether there was any foul play involved, or just too much pressure to handle.

Common sense says there is usually a LOT of foul play among high ranking banking officials.

Seriously there is some sort of amnesia effect going on. The rate that banking execs get in trouble closely matches mafia families.

Also their suicide and accidental death rate...

I highly recommend "The International" 2009, inspired by true events (BCCI scandal).

Here’s [1] an article about JPMorgan doing similar employee surveillance starting in 2009.

[1] https://www.bloomberg.com/features/2018-palantir-peter-thiel...

I wonder if Mr Khan and Mr Thiam are still living next to each other and if Mr Khans view of the lake is still being blocked by the two trees.

What is more astonishing is amount of money these guys manage is measured in the Trillions of USD.

If anyone is curious about why they fought in the first place, apart from work rivalry, I came across an article that explains. It is because Khan bought the house next to Thiam and leveled it. Took his sweet time, 2 years or so, to build a new house. I can see how continuous construction for two years can be very annoying.

Skimming though the article did not explain what the scandal is about.

The CEO of Credit Suisse was accused of hiring an investigator to follow around a former executive who went to rival UBS. The "scandal" is that Swiss bankers are supposed to be too Swiss to do such things. The irony is that neither the CEO nor the executive are actually Swiss because high finance these days knows no nation.

The COO got fired as well.

Actually, to my knowledge, the COO is the only one that got fired. The narrative says that he hired the detectives by its own initiative, without informing the CEO or any other members of the board.

Iqbal Khan is Swiss

IKR? And the word count is almost 1000. Probably a naive question, but are artilces written like this to increase page dwell time metrics for adds? Is that why recipes on the internet hide the ingredients in long stories about the author's grandmother and descriptions of the countryside in the fall?

Well, as the golden leaves fall from trees in autumnal mists, i can tell you about that time Jimmy's dog scooter, fresh from chasing ..

Cough. Yeah it's filler

Additionally, this article has a lot more background on the scandal:

https://www.bloomberg.com/news/articles/2019-10-01/thiam-and...

The tone of this article is incredibly provincial for something published on HN...

It's seems to be nothing more than mundane chit-chat with not so much of interest outside Zurich social casting.

The article is light on details of this spying, I'd be curious what they did. Followed folks? Pushed malware to phones ala NSO?

Does Switzerland have any future? It's no longer a bank haven for rich Europeans evading taxes nor 3rd world dictators, its banks don't show entrepreneurial spirit in finding and investing into high-potential startups, rather to well-connected wantrepreneurs, there are no easy money to be made in Eastern Europe/Russia any longer, and its conservatism is likely going to prevent them from making necessary changes until the decline is felt in upper strata of society.

Switzerland has some of the largest corporations in the world in the pharmaceutical industry, and they're by far leaders in the watchmaking industry. Banking isn't the only business they rely on.

I know about Basel and its pharma industry that is still top-notch, but as for banking they seem to go down rather quickly even if the effect is not going to be felt for the next decade outside negative interest rates. As for watches, I am not sure that is very relevant since smartphones, outside quickly converting expensive watches into cash while on the run from authorities...

> ...as for banking they seem to go down rather quickly...

I do think that Switzerland might have a problem with banks soon or later, but currently I don't see such situation clearly developing (rather more in Germany with Commerzbank & Deutsche Bank?).

And then there is pharma, high tech and companies like Logitech. Switzerland is doing just fine.

Just out of curiosity, which Swiss-grown high-tech is there? I know only of Sauber Group.

Another example is ABB

There are lots, you just never hear of them, because those are "only" small to medium sized companies.

That's one, also the founders tend to be quite modest.

Here is a swiss manufacturer. A run-of-the-mill company with $1/2 billion in annual sales in a high margin, high tech area.

https://www.maxongroup.com/maxon/view/content/product-overvi...

https://www.oerlikon.com/en/industries/aerospace-industry/

The medical-related area has probably others, but I personally have no clue about that.

I recently learned about SonarSource: https://en.wikipedia.org/wiki/SonarSource

Well, if you have a very large capital, and you don't do anything risky with it, it's going to work for it's own growth. You don't need to be very smart or inventive.

Switzerland is not in the part of the world that is experiencing massive population and productivity increase. It might keep its current level, though its relative significance could be quickly overshadowed by Singapore/Shanghai/Mumbai with resulting long-term negative effects, like inability to attract clients from those parts of the world experiencing highest growth and highest ROI.

Quality over quantity. Switzerland is not famous for futuristic factory cities and impressive government projects. Their power is in decentralization, where the issues of a commune are efficiently resolved by local authorities who are the part of it.

Another thing, they have strong universities, with good connection between science and innovations. When I checked their startups, a large share of them focussed on advanced science or tech.

They also attract our (German) best specialists, particularly, doctors :)

> Switzerland is not famous for futuristic factory cities and impressive government projects.

The Gotthard Base Tunnel would like to have a word ;)

https://en.wikipedia.org/wiki/Gotthard_Base_Tunnel

It might not be as visually impressive as a new airport or bridge, but it is one of the largest infrastructure projects of the last couple decades worldwide.

Long term, I'm not sure. But short term I think they have a very very nice future for themselves.

The biggest problem the Swiss have is that everywhere else seems really dirty in comparison.

Nestle -- the largest food company in the world (according to Wikipedia) -- is Swiss.

I would agree with your sentiment if you change your first sentence to "Do swiss banks have any future?"

Switzerland definitely does.

Isn't banking a backbone of the whole Switzerland, and like the main owner of rental properties as well? A friend in Zurich explained to me that people want to buy properties, but nobody is selling and owners prefer rentals. If banking declines, that could lead to a strong rentier economy choking economical progress. I am not talking about major changes within a decade, but beyond that, especially in comparison to China or Singapore.

> Isn't banking a backbone of the whole Switzerland,

Banking and insurance is nowadays somewhere between 5% and 10% (depending which calculation method you use) of the gross value of Switzerland.

Switzerland is still the biggest wealth manager. Most of the wealth (aka black money) managed by swiss banks is nowadays just in offshore tax heavens, like the US.

The real backbone and the reason for stability are those thousands of small and medium sized manufacturing companies.

Switzerland has more than just banking IIRC. Much more.

For example, many tech companies put offices there, and choose to host servers to be both out of US and EU jurisdiction.

You will not be allowed to do illegal things, but there's less worry about things like FISA abuse

https://theintercept.com/2019/10/10/fbi-nsa-mass-surveillanc...

Switzerland’s attractiveness was always more than its heavily advertised banking secrecy laws.

Before I answer you, did you know that neighboring Austria’s banking secrecy was just as strong and is still very strong for Austrian citizens? Does Austria have a future? Silly question you might conclude.

Switzerland’s attractiveness is in its confederate structure, the national government is still extremely small and the states (cantons) administer regulations on any entrepreneur’s behalf and itnis applicable law in all Swiss states barring any conflict. But the general lack of conflict comes from Switzerland being sparsely population, nothing is happening! So, the fintech sector in the state of Zug pays just as much as Silicon Valley except with the lowest state taxes and no federal income tax. All because a couple people asked the financial regulator in Zug (population 100,000) to accept some useful laws.

You get the whole brand of Switzerland and its sovereignty from a tiny state agreeing with you. Shop around!

Being an EFTA member but non-EU and non-Eurozone allows it to experiment more dramatically without pushback from Brussels.

The mixture of cultures in Switzerland smoothes out some of the quirks of the monocultures in its neighboring countries

Absolutely, world-class universities (not just one), highly educated workforce, top rankings everywhere, largest companies in the world, high-tech companies etc. It's just that other countries narrowed the gap. 30 years ago, many countries in the world were poor and backward. They narrowed the gap to Switzerland. It's natural that Switzerland doesn't have the same wide lead anymore. But that's a good thing (for Switzerland and the rest of the world).

You’re just showing that you’re not judging on information but on a hinch of what Switzerland is to you.

1) Very conservative and risk-averse population, yes, but also really open to technological innovation

2) Best universities in mainland Europe

3) High profile mutlinationals having their headquarters there

This could go on and on ...

Does this have any connection to the "Spygate"[0] story in the US?

[0] http://archive.is/PxYXO

* The facts of this story are still widely disputed beyond what the Wikipedia article shows.

Does not appear to at a light skim thru, just may happen to have the same name...

It does not appear to be related. As a side note calling the US Spygate a 'conspiracy theory' on wiki seems a bit disingenuous. It'll all come out eventually and be interesting to see how history views those events... 'OCONUS lures', foreign intel collusion, information laundering through intel (push & pull) and all. It seems very fishy, looking forward to the release of the facts. From my rather deep research I'd put it more in the plausible but, unverified category rather than full blown 'false conspiracy theory'.

I agree that the article doesn't reflect the reality of the situation. One must understand that the Wikipedia acticle's content is controlled by gatekeeping-editors who collectively agree on what they want it to say. Trying to change the narrative there is an uphill, literally rigged battle.

I am also suspicious that reporting on this new "spygate" story might be an attempt to muddy the SEO waters.

It's a subset of the "Deep State" conspiracy theory, so it deserves them moniker.

I remember when we had a president that wasn't a conspiracy theorist.

Any chance you can expound on “your rather deep research”?

So far, my research, like Trump’s tweets, have surfaced no evidence.

No, this is about an ex-employee credit suisse spied on.

This behavior does not seem like something I would put beneath any large financial institution. The large sums of money at stake for them make the collateral/fallout of these types of scandals small in comparison.

Except in the context of Switzerland, and the Swiss banking / Zurich bubble specifically, this is absolutely a major scandal. What was once a 'pristine' banking organisation that upheld the highest standards and ideals (at least, in the private banking sector) is now significantly tarnished.

This isn't going to make mainstream press headlines, but I don't think this is going to go away anytime soon.

An apt reminder that we're all just meat bags at the end of the day.

Yeah, I'm not including myself with entitled man-children that throw a tantrum when their garden is impugned. This is more of a reminder that our rulers are less ethical, less self-disciplined, and less wise than the average Joe. Why? Because they can be.

In what sense are Credit Suisse execs "our rulers"?

To the degree that they have money and that money is power.

Please, having “some” money certainly doesn’t make you a ruler.

Money may make you powerful in some context, but being powerful doesn't make you a ruler.

power implies a degree of control over something, one doesnt need to have 'serfs' to be a ruler of some sort, i am the ruler of my raspberry pi, it will do what i say, and i am in control of it

The original question was about what would qualify somebody as "our ruler". I certainly don't see how I am ruled by a Credit Suisse executive, or how I would be ruled by such an executive even as a Schweitzer.

It’s not far cry from a developer receiving an unwanted and negative code review. Hurt ego is hurt ego

"They're Made out of Meat"

https://www.mit.edu/people/dpolicar/writing/prose/text/think...

The excellent video version: https://www.youtube.com/watch?v=7tScAyNaRdQ

Hilarious, thank you!

that's fantastic :-)

Reminds me a little of an Asimov short (but funnier and better dialog)

The Vatican was raided a few weeks ago at the same time AG Barr was visited the Italian intelligence minister. I would bet money this is related somehow.

Regardless of an alleged relation, I am very interested to know the details of Barr's Europe trip. I wonder if he will be visiting the FBI office in Ukraine.

The swiss rolled over after 9/11. That's when I knew the supposed and "renowned" swiss "privacy" and "discretion" was bunk.

"It’s not just that power shifts from one country to another, from one political party to another, from one business model to another, it’s this: Power is decaying" - Moises Naim [The End of Power] The book basically says, it is becoming easier to get power, harder to use it to control others and harder to keep it once you have it.

Well when America vacuums up power if you are a European nation without any ammo you better watch out.

Are you advocating for remilitarizing Germany, an American invasion of Europe, or a second amendment right to Hoovers?

In any event, definitely don't vacuum up ammo. It's bad for the vacuum at a minimum.

He's saying that we're too use to kill each other in Europe, and we need some external power as middleman to keep heads cool, which is true.

Just before the Ukranian war started I thought another war in Europe was nearly impossible. And here we are.

Did you forget about former Yugoslavia?

What about the Turks and the Greeks?

The UK might end up in a war in the next two decades or so if they slide any further.

War is a long term guarantee.

Indeed, It just wasn't in my recent memory.

Remilitarizing Germany makes sense. We can't punish this generation for past sins.

Doing so under the umbrella of NATO would be even better if we can swing it. No guarantees on that right now though.

Yeah, this time it will be fine.

> easier to get power, harder to use it to control others and harder to keep it once you have it.

curious - if it's harder to use/keep, how is it actually 'power'?

You have power but so do a lot of other people. You use your power to serve your best interests, but people with equal or greater power are also acting in their best interests and sometimes that means your power and their power clashes.

When that happens, you don’t always get the result you want, but maybe neither of you gets the results you want. Maybe what ends up happening is some kind of canceling out of your respective powers.

If the power dynamics in the market are diverse enough, people with competing interests and ideologies have various forms of power, then this will happen more often than not and you’ll see power canceling out power more often than you see power effecting the influence of the people that wield it.

Thats a very good answer. Requires one further piece.

Cancellation of competing power occurs as Interconnections Increase. The more connected the world gets the more power bumps into each other.

For anyone interested in addition to End of Power, another good book is Niall Ferguson's The Square and the Tower. It tells the story through different moments in history of what happens to Power(Hierarchies) when they get connected to the Network.

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