Investment banks got a brief lift from Wall Street results this week, but surprising reports from Credit Suisse are likely to send their confidence back into the basement, the Financial Times reports. The Swiss firm issued an unexpected first-quarter profits warning yesterday—and said “intentional misconduct” from its own traders was partly to blame. Credit Suisse's shares took a 9% dive following the disclosure.
The bank's boss said the individuals concerned had been fired or suspended, but didn't comment on speculation that the traders had been cooking the books to protect their bonuses, a prospect that will raise fears of similar hidden losses at other banks. Credit Suisse wrote down almost $3 billion in assets last month as market volatility and plummeting revenues wiped out considerable profits from its private banking arm.