Because the Swiss bank is a source of Swiss pride, its current problems represent a potential national trauma.

Credit Suisse has «an outstanding franchise, contrary to what happened with Lloyds 10 years ago… and outstanding macro trends,» incoming Chairman António Horta-Osório told the «Financial Times» (behind paywall) in an interview to mark his departure from Lloyds, which he has run for the last decade.

The comparison is interesting because the British bank traces its roots back more than 300 years – and had to be resuscitated by the government in 2008. It wasn’t until four years ago that Horta-Osório was able to celebrate fully severing the ties forged from the shore-up.

Turmoil And Wreckage

At Credit Suisse, he faces wreckage and turmoil of a piece of Swiss identity: the Swiss bank’s roots are deeply entwined with Switzerland’s history and development. Its investment banking losses have undermined those ties, giving rise to worries of a national trauma like Swissair, the national carrier which collapsed following the 9/11 terrorist attacks.

The Swiss bank isn’t in need of resuscitation, but there are nevertheless parallels to Swissair, which failed after it couldn’t secure the capital it needed to survive. Credit Suisse has repeatedly avoided radically altering its strategy (crosstown rival UBS did so in 2011).

Wall Street Ambitions

The Swiss lender’s management has stuck to a «one-bank» it set up in 2005 out of Solution Partners, a team of former investment bankers-turned-wealth managers overseen by capital markets veteran John Zafiriou. Credit Suisse’s performance over the years has been volatile with the occasional blow-up.

Its ambitions to play in the top-tier of Wall Street banks hasn’t sat well with its growing aspirations in wealth management in recent years. The conflicts of interest inherent in «one-bank» for entrepreneurs is embodied by Greensill and founder Lex Greensill.

Horta-Osório needs to act quickly to prevent the current crises from spilling over. The investment bank and its value for the Swiss bank’s wider business is a key priority: if Credit Suisse sticks with the riskier corners of Wall Street, it jeopardizes its ability to make money elsewhere (investors have no tolerance for another case of Archegos, which is going to wreak another $600 million in damage next quarter).

Last In Pecking Order

The hedge fund-family office illustrates where Credit Suisse stands in the investment banking pecking order: while rivals Goldman Sachs and Morgan Stanley exited ruthlessly and swiftly, the Swiss bank was stuck with the bulk of losses.

As long as CEO Thomas Gottstein continues to depict Archegos as an outlier, and accrues for year-end bonuses in the securities unit without considering deeper, structural changes to Credit Suisse, he is playing recklessly with capital. The parallel to Swissair is that the airline also felt secure in its status as the national carrier to Switzerland and continued, undeterred, on a risky, capital-intensive growth strategy that became its undoing.

No Time To Waste

For Swissair, help from outside came too late for a rescue. For Credit Suisse, Horta-Osório represents fresh blood who told the «FT» he had a clear idea of what is required and signaled backing for Gottstein. The CEO has by contrast telegraphed that he would prefer to stick with «one-bank».

The crises at Credit Suisse and Swissair, which is now owned by Lufthansa, have one thing in common: there is little time to waste. «Uncertainty over the nature and extent of risk-control failings and over their longer-term impact on the bank's strategy and franchise increases the risk of weaker earnings prospects, particularly when the investment bank's environment-driven revenue boost wears off,» rating agency Fitch said last week.

 Katharina Bart contributed additional reporting