The CEO of Fidelity outside the U.S., Anne Richards, is surprisingly blunt about what she thinks of recent events in Swiss finance.
Credit Suisse’s Greensill Capital and Archegos debacles have international industry rivals upset. In an interview published Wednesday in Swiss financial newspaper «Finanz und Wirtschaft» (in German, behind paywall) Anne Richards said: «That sort of thing makes me sick. The regulatory authorities and the good companies are working really hard to ensure there are no bad operators in our sector.»
She voiced displeasure at the twin scandals which have hit Credit Suisse, saying she feels there is a lack of respect in dealing with money, adding that this happened again and again in the financial sector and that Archegos and Greensill were just two examples. Richards has run the U.S. asset manager's international activities, which are concentrated in Europe, since 2018.
Cheap Money
She conceded that Fidelity International too was not immune to the risks inherent in the sector. «But we have managed to steer clear of most of the major scandals. We are basically very conservative and have hardly any leverage in our portfolios. In addition, our internal systems are set up to give us early warnings,» she said.
However, one shouldn’t become complacent and think something like that couldn’t happen to you, Richards added, echoing concern voiced recently by Edmond de Rothschild overseer Ariane de Rothschild on Greensill's wider effect on the money management industry.
Small Comfort
The Fidelity CEO put the problems at many asset managers down to cheap money from central banks creating the opportunity for leverage to build up in the system and considerable positions to accumulate. If something went wrong then these positions were very exposed.
Richards said the regulatory framework which was supposed to protect the industry from such collapses was clearly defined. «Everything outside this is no man’s land, and unfortunately there will always be companies which operate in this territory. There is small comfort in the fact that there were no systemic consequences despite recent events.»
