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The ex-UBS MD who contributed to Credit Suisse's meltdown

Amidst all the back-patting about UBS being a comparatively stable place that was fortunately around to rescue the Swiss banking system in its hour of need, it's worth recalling that had Credit Suisse (maybe) not hired a certain UBS MD nearly five years ago, it might not have been in need of help anyway. 

Unfair as it is to blame Credit Suisse's predicament on a single person (we've already suggested multiple culprits and there are others, not least Uhrs Rohner and Lara Warner), Credit Suisse may have found itself in a stronger position had it not hired one UBS managing director, Ryan Nelson, in 2018. 

Nelson, who spent eight years at UBS in New York and Hong Kong, joined Credit Suisse as head of prime finance. As such, was one of the key individuals responsible for the $5.5bn loss incurred by the bank through its mishandled relationship with Archegos, Bill Hwang's family office. It was that loss that helped trigger the chain reaction that led to events of the weekend.

Although Ryan isn't mentioned by name in the 190-page report produced by Paul, Weiss, Rifkind, Wharton & Garrison LLP on the Archegos affair, he's clearly identifiable throughout by his title. While the report stresses that there was no "fraudulent or illegal conduct", it also says that Credit Suisse senior management were of questionable competence, particularly in prime services, that the main concern of the prime services business was "maximizing short-term profits," that visibly mounting risks at Archegos were ignored and that the co-heads of prime services (Nelson and Credit Suisse veteran John Dabbs) were instrumental in appointing a former salesman who'd spent years selling to Archegos and who had minimal risk experience, as Credit Suisse's head of prime services risk (Parshu Shah).

Where is Nelson now? He was cut by Credit Suisse along with Dabbs in April 2021 and is seemingly retired/hanging out, although he's not much older than 40. Dabbs, meanwhile, has found himself a new role as entrepreneur in residence at quant fund DE Shaw and Shah is now giving back as chief development officer of a New Jersey Community Development Corporation.

It's possible that Nelson is doing something worthy too, and that he hasn't mentioned it online, but his fateful three years at Credit Suisse are also a reminder that implanting a bit of UBS culture wasn't a panacea for Credit Suisse in the past. 

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Photo by Chandler Cruttenden on Unsplash

AUTHORSarah Butcher Global Editor
  • ph
    23 March 2023

    I'm amazed at;

    1. The trust placed in big bosses who often are mainly looking out for themselves, and know far less than they project.
    2. The incredibly bad risk management in some banks.
    3. The incredibly hands off attitude by senior management at some firms.
    4. The incredibly have handedness at some other firms.

    I worked a couple years at an Oriental bank, in the US HQ. The big bosses out of Head Office did pick SOME very good bankers, at least, though they almost always paired them up with their own from HO regardless of competence. Otherwise, HO was almost completely hands off, relying on corrupt and incompetent Americans for nearly everything outside of banking, believing all they were told regardless of reality. An odd example; a few years ago, I read a Head Office newsletter that talked about IT improvements. It said that in the US, the upgrade from Win 7 to Win 10 was about finished. In reality, it hadn't even begun. And there was minimal communication between HO and our offices - we couldn't even look up contact information for HO people we might need to be in touch with.

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