Webdesk: The US Federal Reserve said on Monday that the Swiss banking giant UBS fined a total of $387 million. It is for wrongdoing by Credit Suisse, a company it just bought.
Swiss officials pushed UBS to buy its former rival Credit Suisse earlier this year. This was because of a banking crisis caused by the failure of Silicon Valley Bank, a US regional bank.
In a statement, the Fed said that UBS fined $387 million by the Fed and the Bank of England because Credit Suisse did not “adequately manage” the risk created by the US family investment fund Archegos, despite repeated warnings.
Credit Suisse lost about $5.5 billion when the family hedge fund that Bill Hwang ran went bankrupt.
The Fed said that “the misconduct involved Credit Suisse’s unsafe and unsound counterparty credit risk management practises” with Archegos. They also said that UBS would have to pay a $268.5 million fine and sign a consent order.
The Fed said that the new owner of Credit Suisse would also fined by the Prudential Regulation Authority of the Bank of England. The total fines from the two regulators would be about $387 million, the Fed said.
The Fed said that the move against UBS taken with the help of the Swiss Financial Market Supervisory Authority.
