Credit Suisse has hired an executive from Goldman Sachs as its chief risk officer, as the Swiss bank sets about reinforcing its controls following a spate of crises.
David Wildermuth, who has been deputy risk officer at Goldman since 2015, will move from New York to Zurich to take up his new post by February 2022.
Credit Suisse has been rocked by a string of scandals in recent years, culminating in the twin debacles in the spring surrounding specialist finance firm Greensill Capital and family office Archegos Capital. Both revealed critical weaknesses in the bank’s risk management and culture.
The Swiss bank was forced in March to suspend $10bn of funds invested in debt linked to Greensill. Just a few weeks later it lost $5.5bn after the collapse of Archegos, which was a client of the bank’s prime brokerage unit.
Credit Suisse responded by removing several top and mid-level managers, including Lara Warner, who had overseen risk management and compliance. Andreas Gottschling stepped down from his role as head of the Credit Suisse board’s risk committee in April after several large shareholders indicated they would vote against his re-election.
Joachim Oechslin, who had been Credit Suisse’s chief risk officer until 2019, took over responsibility for risk management on a temporary basis when Warner left in April.
When Wildermuth joins, Oechslin will return to his role as strategic adviser to chief executive Thomas Gottstein.
In a statement on Tuesday, new chair António Horta-Osório said Wildermuth would “help shape the group’s enhanced risk management framework, an essential part of the bank’s strategic realignment currently under way”.
A 24-year Goldman veteran, Wildermuth has spent the majority of his career working in risk management roles and was named a partner in 2010. By contrast, Warner had joined Credit Suisse as an equity analyst and rose to her risk and compliance role after being finance director for the group’s investment bank.
“We picked him because he has deep experience in both credit and risk, [and] at a leading financial institution,” said one person familiar with the hiring process. “It is a demonstration we can still hire top talent from rivals.”
Another added: “Bringing in such a high-calibre appointment is a clear sign of intent that we want to strengthen our risk management defences.”
Goldman had also offered prime brokerage services to Archegos but, unlike Credit Suisse, managed to escape the fallout relatively unscathed. The US bank has attributed its better outcome to its risk controls and the fact that it held sufficient margin to trade out of the positions without losses.
Goldman was also one of the first banks to unwind its Archegos-linked positions, while Credit Suisse brokers moved much slower.
Credit Suisse this month announced it was poaching another Goldman executive, Joanne Hannaford, as chief technology and operations officer. Both Wildermuth and Hannaford will join Credit Suisse’s executive board and report to Gottstein.