Swiss lawmakers are about to debate Credit Suisse’s troubles, adding to Chairman António Horta-Osório's list of woes.

A parliamentary committee will discuss Credit Suisse this week, left-wing politician Prisca Birrer-Heimo told Sunday’s «Sonntagszeitung» (behind paywall, in German).

«The central question is whether regulation of major banks needs to be tightened,» she told the Swiss weekly. Swiss financial regulator Finma, which is currently probing Credit Suisse over Greensill, Archegos, and corporate espionage, will also be asked to speak before the committee, she said.

Growing Worry List

The most recent interest by the Social Democrat party which has long pushed for tighter reins on banks is both unsurprising and vague: it isn’t clear how other major parties feel about more closely regulating both Credit Suisse and UBS, which was also ensnared by Archegos.

However, it does add to a growing list of worries for António Horta-Osório, who took over as chairman of Credit Suisse just over two weeks ago. The Swiss bank, one of five systemically relevant lenders in Switzerland, just tapped investors for $1.9 billion after a wipeout on Archegos. Roughly every third of Credit Suisse's 47,860 employees works in Switzerland.

Compensation Conundrum

Credit Suisse also faces what appears to be increasing pressure to reimburse clients who lose money on supply chain funds managed by Greensill, the «Financial Times» (behind paywall) reported on Sunday.

The outlet quoted a client who summarized the conundrum: «Credit Suisse’s client advisers are telling me that 'it is not my fault,' they agree top management should be acting differently to try to keep the relationship going, but it has been irreparably damaged,» the «FT» reported.

Credit Suisse had warned in its annual report that it may see withdrawals during the year due to the Greensill scandal.

Gap In Capital Buffer

The «FT» reported that some Credit Suisse top executives are fearful that any financial concessions towards clients will undermine its legal case against Greensill, which collapsed shortly after the Swiss bank pulled the plug on the $10.1 billion line of supply chain funds. 

Credit Suisse is also worried that any reimbursement may have implications for its capital buffer, which Finma has ordered to be topped up due to the scandal.

As finews.com reported in April, the bank has very little choice in the matter, after its $4.7 billion loss on Archegos hit its capital – it simply doesn’t have the funds for recompense. The handover from long-standing Chairman Urs Rohner to Horta-Osório complicates matters, amid a wider strategic review.

Casting Doubt

For now, the bank is seeking $1.2 billion from Sanjeev Gupta, a frequent Greensill client whose companies Credit Suisse has identified as one of three principal sources of valuation uncertainty.» Credit Suisse claims Gupta, who is being investigated for suspected fraud and money laundering, owes the bank $1.2 billion.

Meanwhile, Swiss outlet «Sonntagszeitung» (behind paywall, in German) cast doubt on Credit Suisse’s claims it was left in the dark by Greensill. The two disagree about when the now insolvent U.K. financing boutique informed the Swiss bank that credit insurance on assets like those tied to Gupta that the two managed would lapse.

Class-Action Looms

The Swiss weekly reported that Credit Suisse held copies of the insurance policies and may have somewhat naively assumed the insurance would roll over automatically, as it apparently had done previously. A spokesman for Credit Suisse told the outlet it learned in February of this year that the insurer, Toyko Marine, wasn’t renewing the policies.

By contrast, Greensill CEO Lex Greensill already knew in September. The issue – which also involves U.S.-based Marsh McLennan, Greensill’s insurance broker – is likely to be key in a slew of class-action lawsuits lodged against Credit Suisse by fund investors nursing losses on the supply chain funds.