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Credit Suisse First Boston: Has the Ship Sailed?

On the 27th October, current Credit Suisse (CS) CEO Ulrich Körner announced to shareholders the latest restructuring plan his bank will undertake to regain the share value it has lost in the last few years. A series of scandals, stemming from poor risk management and permissive governance, has led to Credit Suisse’ share price falling close to 60% in the last year. The restructuring plan is the second attempt at stabilising the bank in the last two years, with the former CEO Thomas Gottstein announcing a similar plan before leaving due to pressure from scandals and poor performance.

The latest restructuring plan involves downscaling the investment bank significantly and focusing on Credit Suisse’ strong wealth and asset management businesses. The investment bank will look to offload capital in the volatile securities business and focus more on mergers and acquisitions as well as capital markets. The restructuring will require an additional $4 billion from investors. An external memo released described the investment bank reshuffle as “CS First Boston is expected to be more global and broader than boutiques, but more focused than bulge bracket players”. Critically, the investment bank will spin off into an independent firm, and will be renamed CS First Boston in a nostalgic bow to its banking history.

The recent flurry of scandals began in March 2020, when then CEO Tidjane Thiam was forced to resign after an investigation had found that the bank had hired private detectives to spy on the former head of wealth management Iqbal Kahn after he had left Credit Suisse for competitor UBS. Credit Suisse tried to downplay the event, but further investigation from the Swiss regulator FINMA found that there had been seven other incidents of spying between 2016 and 2019, and stated that there were serious organisational shortcomings within the bank.

A year later, Credit Suisse was marred in further controversy when British financier Greensill Capital collapsed. Greensill Capital was a supply chain finance firm, providing interim finance to businesses that need to pay suppliers in advance. This allowed banks such as Credit Suisse to sell Greensill’s debt to investors. The debt was advertised as low risk due to the fact that the underlying credit was insured. However, in March 2021, Greensill Capital collapsed after its insurance provider stopped underwriting its debt. This led to Credit Suisse freezing $10 billion worth of funds which were not fully repaid, losing a significant amount of money for clients in its asset management division.

The turmoil of March 2021 did not end there for Credit Suisse, when Archegos Capital Management, a family office and client of CS’ prime brokerage business defaulted. This led to losses of $5.5 billion for Credit Suisse, who were the worst affected of the bulge bracket banks by the default. Other investment banks had suffered losses, but these had been limited due to other banks to settling some of their positions with Archegos prior to the default. David Soloman, CEO of Goldman Sachs, stated that “We identified the risk early and took prompt action consistent with the terms of our contract with the client”, praising the risk management of his firm.

An independent report into the incident criticised Credit Suisse for focusing too much on short-term profit maximisation and not recognising the extreme risk-taking behaviour of Archegos. As a result of both losses, Credit Suisse had to raise an additional $1.9 billion in capital from investors to sure up its balance sheet.

The current Chair of CS, Axel Lehmann, admitted in May of this year that CS has failed to be proactive in risk management and that the scandals that have plagued the bank cannot be perceived as isolated incidents. The current restructuring plan intends to limit the sources of risk, but it is likely that a complete reform of how CS assesses risk is also necessary to limit any future scandals.

The use of First Boston to define the new “boutique bracket” investment bank is an interesting strategical move. First Boston was a US-based investment bank, which was first partially acquired by Credit Suisse in 1988, with the acquisition being completed fully in 1996. The bank was renamed Credit Suisse First Boston, commonly referred to as CSFB.

CSFB was a significant competitor in the late 90s, gaining success underwriting IPOs for many high-tech companies. CSFB operated as a bulge bracket investment bank and was officially integrated into Credit Suisse in 2005. Many banks were chasing the universal bank model at the time, making this integration sensible. The might of the original CSFB is in contrast with the new CSFB, which is being downsized to offer a more bespoke service than bulge bracket banks.

If the restructuring takes place as planned, it will be interesting to see how well the investment bank can attract clients due to its reduced offering of services. Direct comparisons in the market are Jeffries and PJT Partners, who have experienced sustained profitability in recent years. However, the detachment of the bank from consumer deposits will make CSFB’s balance sheet more unstable, and the significant losses experienced in 2021 cannot be repeated if the new investment bank is to survive.

CSFB made its name in the late nineties and early naughties, when high risk-taking was rewarded with significant profit and compensation. However, severe risk-taking has led the investment bank to its knees, and it is clear that prudent risk management is necessary. This new risk strategy of CSFB will need to be significantly different from that of the original investment bank.

The recent turmoil has left Credit Suisse vulnerable to a takeover, with rumours of a merger between CS and UBS intensifying. The actions of the new management team will likely decide the future of the bank. A repeat of previous missteps may lead to the vanishing of the Credit Suisse name, let alone First Boston.

Interview with GiveDish 

Zain Alkhatib, Anna Lelashvili and Rein Samarah

Givedish is a social enterprise working with restaurants and cafes to tackle food insecurity, both nationally and globally. For every GiveDish meal sold, a meal is donated to those in need! Cian McGlynn and Olwyn Patterson discuss the story behind their social start-up. 

How does it work? 

A GiveDish meal can be purchased at any of GiveDish’s partner restaurants: Bread 41, Mad Yolks, Chimac, and most recently, Sumaki. The social enterprise partners with Mary’s Meals; a school-feeding programme owned and run by community volunteers in countries to provide free meals. With Mary’s Meals, it costs €18.30 to feed a child for a school year. GiveDish breaks down this cost to fund the free meals provided by Mary’s Meals. On GiveDish’s website, viewers can see the number of meals donated by each partner restaurant. In September alone, GiveDish’s three partner restaurants donated 1,096 meals – and this is only the start! 

The Team

Cian is a second-year Global Business student who became involved with Trinity Entrepreneurial Society. After a few months with the society, he decided to participate in LaunchBox, making his dream to set up a business a reality.

Olwyn is a third-year MSISS student who always had a desire to make something of her creativity. She fondly recounts that as a child that she used to make loom-band bracelets with her friends to sell at charity day in school. Now, she tie-dyes jumpers, socks and t-shirts to sell for charity on Instagram. Upon starting in Trinity, she began to think “about business and entrepreneurship more seriously” and realised that she “could have a larger impact through business than just donating money myself.”

Where they are now

Cian and Olwyn took part in Trinity’s Launchbox, with their start-up, GiveDish, winning 3rd Prize. Launchbox is an accelerator run by Tangent every summer, where ten teams are given office space and €10,000 to work on a start-up. Cian and Olwyn believe that they met some of the coolest and most interesting people through Launchbox. Great speakers such as Dan Hobbs from Protex AI, and Eric Risser from Artomatix (both Launchbox alumni), worked with the start-up groups.

During the interview, Cian and Olwyn revealed that they came up with their enterprise idea “by chance”. Having entered LaunchBox with a “completely different idea”, the team pivoted after some early discovery and research different business models. One of their mentors, Conor Leen (founder of Stampify), introduced them to a Canadian company with an interesting model and, after conducting some customer discovery, the team were set on taking action.

With regards to the name of the business, the team experimented by typing “as many variations of names that could work into GoDaddy to see if the domain was available”, before finding givedish.com to be perfect. They have since changed their domain to givedish.org, however, can still be found at the original givedish.com domain.

Currently, GiveDish is working on building a software application with some help from a developer, as well as slowly refining their processes and making it more transparent. Furthermore, they are looking to help locally; with the rising cost of living, there are problems on Ireland’s doorstep that must be addressed.

GiveDish’s vision is to make donations seamless for people and increase the ease and convenience of donating by making donation part of a daily activity. GiveDish also solves the problem of decreasing profit margins for restaurants by increasing sales of higher profit-margin items. This is achieved primarily through social media; gaining new followers and new partners, and ultimately, donating more meals.

Plans for the future

GiveDish’s goal is to donate 1 million meals to children in need. The social enterprise have many more partners in the works and will continue to tackle food insecurity both globally and in Ireland. To keep up to date with how many meals GiveDish donate, keep an eye on their website. 

Get in Touch

Website : https://www.givedish.org/givedish-partners

Instagram: https://www.instagram.com/givedishsocial/

Budget 2023: An Overview

The Budget 2023 is one of the most significant budgets in years. The significant tax surplus received
by the exchequer this year is being used to ease the cost of living crisis for those who need it most.


Weekly Social Welfare payments will increase by €12 for all recipients, as well as
those with a State pension. There has also been an increase in the number of Lump Sum
payments, such as double child benefit being handed out in November as well as an increase
in Christmas payments for those on the Disability allowance and Living Alone allowance.


The government has increased the level for paying 40% income tax from €36,800 to
€40,000. This move will help middle income earners take home more money, to alleviate
some of the cost of living pressures. The second USC bracket (2%) has also been increased
from €21,295 to €22,920.


In a direct response to the energy crisis, the government has committed to giving
out €600 in electricity credits during the winter months. The first instalment will be handed out
before Christmas, with the other two coming in the New Year.


The government is set to introduce a tax credit worth €500 for renters; as rents
have continued to rise significantly in the country. They have also introduced a Vacant Home
Tax, to be placed on residential property that is occupied for less than 30 days in a 12
month period. This policy will hopefully encourage more efficient land use.


College fees will be cut by €1000 in a once-off reduction to help alleviate
inflationary pressures, as well as the SUSI grant being increased by 10-14% in September


Free contraception will be available for all women between the ages of 16-30.

The Implications of Tech Giant Microsoft’s Acquisition of Blizzard

Earlier this year, Microsoft announced its acquisition of Activision Blizzard, a leading company in “game development and interactive entertainment content publisher,” for $68.7 billion – which is the biggest gaming industry deal to date. Microsoft’s motives in this deal lie in the gaming industry being “the most dynamic and exciting category in entertainment across all platforms today,” and its participation in developing metaverse platforms. After Facebook transformed into Meta Platforms to increase its efforts in virtual reality, other tech companies have now followed suit in placing bets on the metaverse. Microsoft acquiring Activision plays a key role in its involvement in the “metaverse arms race.” It will also bolster Microsoft’s venture to grow its gaming business across different platforms such as mobile, PC, console and cloud. 

Phil Spencer, the CEO of Microsoft Gaming, states that together with Activision, they will be able to “build a future where people can play the games they want virtually anywhere they want.” Activision has released some of the most successful and well known games on the market, including Candy Crush, Call of Duty, and World of Warcraft. Bobby Kotick, CEO of Activision Blizzard, notes that Activision’s “world class talent and extraordinary franchises,” married with “Microsoft’s technology, distribution, access to talent, ambitious vision, and shared commitment to gaming and inclusion will help ensure [their] continued success in an increasingly competitive industry.” 

            Although the prospect of furthering the metaverse and making games more accessible to individuals on more platforms are positive in the advancement of the tech sector, there are antitrust and competition hurdles that Microsoft must jump in order for this acquisition to succeed. The Competition and Markets Authority (CMA), Britain’s antitrust regulator, acknowledges that Microsoft is disposed to be successful in cloud gaming given its leading cloud platform in Azure, PC operating system in Windows OS, and Xbox. However, these strengths combined with ownership of Activision’s games “could damage competition in the nascent market for cloud gaming services.”  If Microsoft refuses competitors’ access to Activision’s games, the gaming industry could be struck with serious damage – which is why the deal requires approval in several major jurisdictions including the United States, China and the EU. 

            The antitrust concerns lie greatly in how the deal would impair game console creators such as Sony and entrants to the new market of gaming subscription services and cloud gaming. Open competition would be severely harmed if Microsoft gains the ability to refuse rivals access to Activision games or provide them on worse terms. The Phase 1 investigation conducted by the CMA requires Microsoft to address its concern over the control the company would gain over popular games post-acquisition. If Microsoft fails to offer remedy solutions, the CMA would initiate its Phase 2 wherein an independent panel would carry out an in depth analysis and examination of competition implications. 

            In response, Microsoft released a statement in an attempt to appease regulators by saying that Call of Duty would not become an exclusive Microsoft Xbox game and would continue to be available on other companies’ game consoles. The company wants to remain committed in its mission to provide people with “more access to games, not less.” Analysts believe that Microsoft should provide specifications around these exclusivities in writing to demonstrate more credibility and legitimacy in its pledges. 

            Microsoft has painted a very exciting picture of its desire to “embrace choice,” for games to “reach the billions of players where they are and no matter what device they play on,” through this expansion. Their Game Pass subscription option and cloud game streaming technology to bring more games to mobile platforms would allow the company to “open up mobile gaming, create new distribution opportunities for game developers outside of mobile app stores and deliver compelling and immersive experiences for players using the power of cloud.”  However, the stricter antitrust regulations, especially on tech giants, stretches out the period of time between the announcement of a deal and its completion – thus increasing the threat of the transaction disintegrating. Microsoft’s response to the antitrust concerns over its acquisition will set an important example and no doubt offer guidance to future mergers and acquisitions, especially in the tech industry where monopolies are scrutinised to prevent giants from gaining and abusing unfettered power. 

Truss’s first act as UK Prime Minister promises to save the public, but she threatens the value of the pound

Lizz Truss enters no. 10 Downing Street during high-stakes wars; both within her party, and on the Eastern borders of Europe. However, her first battle as prime minister will be tackling the energy bill crisis. This daunting task is made ever more difficult by Truss’s commitment to a low tax economy.

The cost of a cap on energy bills depends largely on its form. A targeted plan to help the most vulnerable households, such as £650 for those on means-tested benefits, would be cheaper. However, it would be difficult to implement quickly and effectively and it would leave families just above the threshold in a precarious position. A blanket tax break would benefit richer households with disposable income, and would cost substantially more.

Furthermore, the cost of the energy cap will likely be increased by factors outside of Truss’s control. Putin has taken a stance against western sanctions by extending the closure of Nord Stream 1. This will increase the price of gas as well as the cost of Truss’s relief plan. As well as this, a relief package of this scale will increase public spending in a demand charged inflation spike, spurring a further rise in interest rates.

With a public debt to GDP ratio of 96%, investor confidence in the UK is low. Couple this with extensive high-interest rate borrowing, Truss will need to provide extensive assurances on payment plans in order to attract foreign investment. However, as of yet all she has done is ensure that taxes will be slashed.

If Truss decides to increase taxes, either approach will be politically difficult. A general tax would be a rejection of her low-tax promise, which could be seen as a return to the laissez-faire approach to policy integrity endured during the Johnson administration. However, a long-term repayment of tax breaks could cut vulnerable households adrift, which would be detrimental to the economy.

With a worryingly high cap on costs, and no real plan to raise funds for repayments, investor confidence is at a worryingly low level. On Monday, Shreyas Gopal of Deutsche Bank claimed the UK could be on a “balance of payments crisis”. Although unlikely in a G7 economy, the risk of a balance of payments crisis is no longer negligible. Therefore, in order to attract foreign investment and fund her relief package, Truss will have to depreciate the value of Sterling substantially, with Deutsche Bank claiming that a devaluation of 30% may be required to attract foreign investment into Britain.                                                                                                                                                                      

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