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Credit Suisse revamps group, faces NY lawsuit

November 21, 2012

Credit Suisse will split off its investment bank outside Switzerland from its global private bank, wealth management and Swiss investment banking business to meet what chairman Urs Rohner called “the new regulatory reality.” Brady Dougan, chief executive of the Zurich-based lender, said on Tuesday that the streamlining of the bank into two main units (Hans-Ulrich Meister and Robert Shafir will jointly run Credit Suisse’s private banking and wealth management business, which includes the firm’s asset management operations, while Eric Varvel and Gael de Boissard will co-head the investment banking division) would reduce complexity and help further reduce costs.

Separately, the New York attorney general is preparing to file a lawsuit against Credit Suisse this week, alleging the Swiss bank misled investors, who lost more than $11 bn on mortgage-backed securities, as it did not conduct proper due diligence on home loans it packaged into bonds, according to a Financial Times report. State prosecutor Eric Schneiderman also is to claim that the bank incentivised lenders to originate more loans, which led to bad lending practices. CS shares closed 1.72% lower.