Systems and Controls: Now Credit Suisse blames "intentional misconduct"

A month ago, Credit Suisse suspended its global head of so called "Synthetic Collateralised Debt Obligations" - along with his team. All are based in London. In a statement, Credit Suisse said "

"Following its revaluation review, Credit Suisse has determined that the pricing errors were, in part, the result of intentional misconduct by a small number of traders.

"These employees have been terminated or have been suspended and are in the process of being disciplined under local employment law."

The bank said: "The review also found that the controls put in place to prevent or detect this activity were not effective."

Credit Suisse has had a number of compliance problems around the world in recent years and the confirmation that the bank sees that its internal systems and controls are insufficient will in some quarters be seen as an important step for the company.

The company has nto described the actions of the traders as fraudulent. It says that the problems were more compliance issues than fraud and arose out of the dealers being "tardy" with the repricing of structured finance products. These, the bank said, were particularly in relation to CDOs and residential mortgage-backed securities. But the bank said that most of the revaluation of its assets was not due to the activities of the traders resulting in over-pricing of assets but rather due to a review against current market conditions in a volatile and unpredictable market.