Credit Suisse: Alpine Railways, Archegos and the $17 Billion AT1 Wipeout

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Alfred Escher founded the bank in 1856 to fund Swiss railways with domestic money rather than French capital, and the share offering drew such demand that far more was subscribed than planned. It financed the Gotthard Railway in 1882 and the national electrical grid, helped fund the disarming of French troops in 1870, and became Switzerland's largest bank. After World War II it moved into secretive private banking. Holocaust survivors' heirs struggled for decades to recover accounts, ending in a $1.25 billion settlement with Swiss banks in 2000. The 1970s Chiasso scandal funneled $900 million in Italian deposits into unauthorized investments, and in 1988 the bank put $725 million into partner First Boston after the burning bed junk bond deal and later took it over.

The bank weathered 2008 with under a billion dollars in subprime write-downs and no bailout. Then came a 2014 guilty plea and $2.6 billion fine for helping Americans hide assets, a 2019 scandal in which COO Pierre-Olivier Bouée had a departing executive followed, billions lost on Greensill Capital and Archegos Capital in 2021, and a 2022 conviction for failing to stop a Bulgarian cocaine ring's money laundering. In early 2023 it reported a 7.3 billion franc loss and material weaknesses in reporting controls. On March 15, 2023, the Saudi National Bank ruled out more support, the shares fell nearly 25 percent, and a 50 billion franc central bank lifeline failed to stop outflows. UBS bought the bank that weekend for $3.25 billion.

• The Swiss Secrets leak exposed details on 30,000 customers.
• The bank put the Savoy Hotel in Zurich up for sale and offered to buy back $3 billion of its own debt.
• Over $69 billion was withdrawn in the first quarter of 2023.
• Regulator FINMA wrote $17 billion in AT1 bonds down to zero while shareholders received a payout, and a Swiss court ruled in late 2025 that the write-down lacked a proper legal basis.
• Credit Suisse ceased to exist as a separate entity in May 2024.