One of the world’s largest financial institutions teetering on full-blown crisis has a person affiliated with the Chinese Communist Party on its risk management team.
On Wednesday, the value of Swiss bank Credit Suisse plunged nearly 30%, forcing an abrupt halt to trading at noon, after it admitted in its annual report that it had “material weakness” and its largest investor, a state-owned Saudi bank, said that it couldn’t provide additional assistance, citing a “regulatory problem”.
Then on Thursday, Credit Suisse said it planned to borrow a whopping $54 billion from the Swiss National Bank as an unprecedented lifeline to boost liquidity.
“These actions demonstrate decisive action to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our customers and other stakeholders,” CEO Ulrich Koerner said in a statement. “My team and I are committed to moving forward quickly to create a simpler and more focused bank built around customer needs.”
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The Credit Suisse office will be photographed in Singapore on Thursday. (Nicky Loh/Bloomberg Getty Images)
However, according to the website, Shan Li, a person with extensive ties to the Chinese Communist Party (CCP), has been a board member of the bank since 2019 with senior roles in the risk management team, Asia advisory board and compensation committee.
Credit Suisse’s website also boasts of Li’s extensive experience with Chinese government-affiliated companies. For example, he is a board member of the Silk Road Finance Corporation, which aims to promote the influence campaign of the Chinese government’s Belt and Road Initiative, and previously held senior positions at the China Development Bank and the Bank of China, both state-owned banks. -property.
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Li’s profile page also shows that he is a member of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC), an important part of the CCP’s “United Front” influence campaign apparatus. According to a US government report published in 2018, the CPPCC is a “critical coordinating body” that brings together representatives of Chinese interest groups and is headed by the Standing Committee of the CCP’s Politburo.
“The CPPCC, an advisory committee headed by the (CCP), is the highest oversight entity overseeing the United Front system,” said the report compiled by the United States-China Economic and Security Review Commission. an independent federal agency.
“The United Front’s strategy uses a range of methods to influence overseas Chinese communities, foreign governments and other actors to take actions or adopt positions that support Beijing’s preferential policies,” the report added. “A number of official and quasi-official entities conduct overseas activities directed or funded by the United Front, including the Chinese government and military organizations.”
Christine Lagarde, the president of the European Central Bank (ECB), addresses reporters in Frankfurt, Germany, on Thursday. The ECB previously assured consumers that the “banking sector in the euro area is resilient, with strong capital and liquidity positions”. (Alex Kraus/Bloomberg via Getty Images)
The CPPCC has also demonstrated its ability to infiltrate other institutions that impact the US economy. The CEO of a huge Chinese tech company that last month signed a high-profile deal to help Ford Motor Company produce batteries for its electric vehicles is also a member of the CPPCC, Fox News Digital reported at the time.
Meanwhile, the near-bankruptcy of Credit Suisse, which followed the collapse of the California-based Silicon Valley Bank, sparked fears of a full-blown global banking crisis and raised doubts about the safety of the global banking system. The European Union tried to allay concerns by confirming that the banking sector remained “resilient”, but Bloomberg reported that the US government was closely monitoring the situation.
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The Financial Stability Board, an international organization that oversees global financial systems, specifically lists Credit Suisse as one of 30 institutions that are “systemically important”.
But in recent years, Credit Suisse has weathered several scandals and pledged to review its risk management activities. In June 2022, the bank announced it would proceed with the major overhauls as it also struggled with litigation costs related to the collapse of the former New York City-based Archegos Capital Management firm, CNBC reported.
Now Credit Suisse is facing legal action from US shareholders who claim the Swiss bank failed to disclose its financial problems and violated securities laws.
There have been class action lawsuits against Credit Suisse in federal court, alleging that the bank made false or misleading statements about its finances and failed to adequately disclose that it suffered a “significant” increase in customer outflows in late 2022. A newly filed lawsuit includes those claims, plus a claim related to material deficiencies in Credit Suisse’s internal financial controls.
Credit Suisse did not respond to Fox News Digital’s request for comment.
Fox News’ Eric Revell contributed to the reporting.
Thomas Catenacci is a political writer for Fox News Digital.