Monday7 October 2019 ★ FINANCIAL TIMES 3
I N T E R N AT I O N A L
SA M J O N E S— ZURICH
At the opening gala of the Zurich Film
Festival a week ago, overchampagne
served to the city’s social elite, the small
talkcentrednotonthedramasofthebig
screen but a much more local affair: the
corporatespyingtale tCreditSuisse.a
It was just a short distance from the
festival’s venue on Bellevueplatz that,
days earlier, Iqbal Khan, a young, una-
shamedly ambitious former executive
at the bank, had spotted a man trailing
him.Theconfrontationthatfollowedon
a quiet treet just behind the polisheds
façades of the Bahnhofstrasse set in
motion two of the most tumultuous
weeks of the past decade in Swiss
finance. Mr Khan’s shadow, it emerged,
wasanagenthiredbyCreditSuisse.
It has been anintangible crisis: no cli-
ents have lost capital; no money has
been laundered; no assets have been
riskilyrehypothecated.
But what should have been a mere
embarrassment for Switzerland’s sec-
ond-largest—andarguablymostrevered
— bank has ended up as something far
more significant thanks to the particu-
lar strains in the insular, but still glo-
bally powerful, world of Zurich’s great
countinghousesthatithaslaidbare.
“The past few years have been a tense
time in Swiss banking,” said JamesBrei-
ding, founder of Naissance Capital, an
investment boutique, and author of
Swiss Made. A global crackdown on tax
havensandtheshiftineconomicgravity
towards Asia had hit Swiss banking
hard, noted MrBreiding, leaving insti-
tutions such as Credit Suisse struggling
todefinewhatmakesthemunique.
It is more than a matter of corporate
branding. “Credit Suisse has historically
hadahaloinSwitzerland,itwasthebas-
tion of the Zurich establishment,
founded by a very famous Swiss entre-
preneur, Alfred Escher,” MrBreiding
said. “The Swiss are not big on heroes
but if you go to the main train station in
Zurich,there’sabigstatueofhim.”
Mr Khan, 43, spectacularly fell out
withchiefexecutiveTidjaneThiam,57,in
a professional dispute, driven by ambi-
tion, ego and insecurity, thatspilledinto
their private lives. Mr Khanquit in June,
later announcing his pending appoint-
ment at ival bank UBS. Credit Suisse,r
fearfulhe would take clients and col-
leagues with him, ordered his surveil-
lance. In the furore which followed that
chain of events becoming public, the
contractorwho acted as a middle man
between Credit Suisse and a private
investigationfirmtookhisownlife.
For many outside Switzerland,
including Credit Suisse’s most powerful
shareholders, the crisis has bordered on
theabsurd.
“Most people outside of this little
European centricity don’t really care or
have a strong opinion on this,” said
David Herro, vice-chairman of Harris
Associates. “This is ground-zero Zurich
with some echoes in Europe. But we
have got to put this into perspective.”
TheChicago-basedMrHerrowasforced
toflyintoZurichtoholdcrisistalkswith
Credit Suisse’s board and emphasise his
backingforMrThiam.
Yet it is in the lurid — if trivial — detailthat the key to the real outrage in Swit-
zerland lies. If the historic essence of
Swiss banking was professional discre-
tion, privacy and restraint, hen it ist
hard to think of a scandal morelikely to
upset: a tale of ambition and ego,
unseemly public feuding, and poten-
tiallyunlawfulintrusivesurveillance.
“You could say of course that Credit
Suisse has been guilty of far worse,” said
Mark Pieth, professor of governance at
the Basel university. “But Switzerland is
a weird place. We like to consider Credit
Suisse as our crown jewel and we say
‘that means you have to behave please’.
Given what happened, I am astonished
therehasnotbeenmoreofastink.”
Much of the public anger, Mr Pieth
notes, is about Mr Thiam and what he is
perceivedtorepresent.
Since he was hired in 2015, Mr
Thiam’sboldstrategytoshakeupCredit
Suisse has impressed many bankers
elsewhere in the world but it has
been seen in Switzerland s an outsidera
trying to dismantle much of whatgave the bank its distinctive character.
Racism was also a factor, said Mr
Pieth.BradyDougan,MrThiam’sprede-
cessor, did not live in Switzerland and
spoke none of the country’s official lan-
guages (Mr Thiam, an Ivorian, speaks
French),yetwasneversopointedlycrit-
icisedforbeinganoutsider.
Besides the weight of history, there
were other reasons for an air of subver-
sion at the Zurich Film festival. Credit
Suisse funds the event. Former model
Nadja Schildknecht, the festival’s crea-
tor and host, is the partner of chairman,
Urs Rohner. Mr Khan, thanks to his role
at Credit Suisse, was known to almost
everyonefromthebankingworldthere.
“It was pretty clear from that evening
that thisscandal has become a real
cross-society story, not just a financial
one,” said oneguest — a former banker,
nowpowerfulSwissbusinessman.
“And for the Swiss, it won’t go away I
don’t think. This sentiment about the
bank and its leadership is here to stay. It
hastriggeredtoomanyissues.”Credit Suisse scandal rocks Zurich elite
Rarefied world of Swiss banking left stunned by tale of corporate espionage at ‘crown jewel’
The Swiss, not
generally big on
heroes, erected
a statue of
Credit Suisse
founder Alfred
Escher outside
Zurich’s main
train station—
Jack Malipan Travel
Photography/Alamy‘This whole
scandal hasbecome a
real cross-society
story, notjust a
financialone’
DAV I D K E O H A N E— PARISFrance is to review how its intelligence
services identify signs of radicalisation
among officers after a knife attacker
killed four of his colleagues at Paris
police headquarters.PrimeMinister Edouard Philippe said
there was a need to make sure proce-
dures to detect radicalisation were
adequate. “It’s our responsibility to
never accept possible flaws [in the
detection of radicalisation] and always
tighten the net,” he said in an interview
withLeJournalduDimanche.
TheinterventioncomesafterFrance’s
anti-terror prosecutor said the attacker
showed signs of radicalisation and
appeared to have planned Thursday’s
assault,inwhichfourpeoplediedbefore
hewasshotdeadbypolice.
Thekiller, a 45-year-old IT profes-
sional who had been working at the
Intelligence Directorate of the Paris
police headquarters since 2003, had
adhered to “a radical vision of Islam”,
theprosecutorsaid.
The revelation has put pressure on
interior minister Christophe Castaner,
who said after theattack n Thursdayo
that theman’s behaviour before the
incidenthadnotgivencauseforalarm.
The anti-terror prosecutor took over
the investigation on Friday after police
examined theattacker’s phone nda
questioned his associates, including his
wife. The prosecutor said on Saturday
that on the morning of the attackthe
killer had exchanged 33 text messages
withhiswife,allofareligiousnature. eH
sent the messages 30 minutes before he
boughttheknivesusedinthekillings.
The prosecutor said the man proba-
bly had contacts with he Salafist move-t
ment, a radical form of Islam. He said
investigationsrevealed his “approval
for certain atrocities committed in the
name of that religion”, including the
deadly attack no agazinem Charlie
Hebdo, ndchangedthewayhedressed.aRadicalisation
Paris police
attack spurs
call for tighter
security net
OCTOBER 7 2019 Section:World Time: 10/20196/ - 18:22 User:elizabeth.durno Page Name:WORLD2 USA, Part,Page,Edition:USA, 3, 1