FirstFT: Credit Suisse is considering a spin-off of its investment bank

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Good morning. Credit Suisse has developed plans divide your investment bank into three parts and revive a “bad bank” that holds risky assets as the Swiss lender tries to emerge from three years of scandals.

Under proposals presented to the group’s board, Credit Suisse hopes to sell profitable units such as its securitized products business in a bid to stave off harmful capital gains, according to people familiar with the plans.

Chairman Axel Lehmann appointed Ulrich Koerner as chief executive in July with a mandate to overhaul the bank, which has been hit by a corporate espionage scandal, the closing of investment funds, record trading losses and a series of lawsuits. recent years.

In the latest proposals, the investment bank is divided into three parts: an advisory business, which may be spun off later; a “bad bank” to hold high-risk assets that will be liquidated; and the rest of the business.

The board and executive team plan to unveil the strategy, which is expected to include thousands of job cuts, with the bank’s third-quarter results on October 27.

Thanks for reading FirstFT Europe/Africa. Here’s the rest of today’s news — Jennifer

1. Vladimir Putin is mobilizing reserves for the war in Ukraine The President of Russia issued an order yesterday mobilization of army reservists to support his ailing campaign in Ukraine and warned that he would use the country’s nuclear arsenal if its “territorial integrity” came under “threat”. However, Western officials brushed aside the nuclear “bluff”.

  • Go deeper: Putin’s “partial mobilization” is a gamble that underscores his shrinking room for maneuver domestically and unlikely to pay offexperts note.

Thanks to everyone who took part in yesterday’s survey. Eighty-three percent of respondents said Russia should be forced to pay reparations for the war in Ukraine, while 12 percent said it shouldn’t.

2. Jay Powell refuses to rule out a US recession The Federal Reserve chairman’s lewd comment came after the central bank raised the base interest rate 0.75 percentage point for the third time in a row to a target range of 3 percent to 3.25 percent, and signaled that monetary policy would remain tight to combat soaring inflation.

“Inflation must be stopped. I wish there was a painless way do it” – Jay Powell

  • Market reaction: US stocks collapsedwith the S&P 500 losing 20.5 percent for the year, while yields on two-year Treasuries hovered near 15-year highs.

  • Opinion: A spike in US borrowing costs has ripple effects for the rest of the world, prompting a global backlash against the Fed, writes Claire Jones.

3. Liz Truss pursues NI’s protocol settlement The British Prime Minister wants to resolve the dispute after Brexit over Northern Ireland for the 25th anniversary of the peace agreement on Good Friday next Easter. Truss tried to ease tensions over the issue during a 75-minute meeting with US President Joe Biden in New York yesterday.

4. Somerset Capital for sale The boutique fund manager, co-founded by business secretary Jacob Rees-Mogg and managing about $5 billion, sales study as chief executive Dominic Johnson prepares to step down ahead of a potential move into politics.

5. Seven people died during the protests in Iran for the hijab At least seven people died in protests across Iran, officials said, after thousands took to the streets in recent days in anger over the death of a young woman arrested for allegedly violating an Islamic dress code.

  • Opinion: The tragic death of a 22-year-old arrested by the morality police has encouraged those who seek freedom, Naimeh Bozorgmehr writes.

A day ahead

BoE rate decision Traders are betting the Bank of England’s Monetary Policy Committee will act more aggressively than in August, when it raised interest rates by 0.5 percentage point to 1.75 percent.

  • Elsewhere: It is expected that the central bank of Switzerland raise the base rate by a full percentage point from minus 0.25 percent, leaving only Japan in the red.

NHS Performance Plan Patients can expect to see a GP within two weeks, and the most urgent – on the same day, as part of the promotion plan Therese Coffey, Health and Social Care Secretary, will talk about England’s cashless healthcare system.

Economic indicators European Commission releases flash September consumer confidence data after falling to an 18-month low a month earlier. The European Central Bank publishes its latest economic bulletin, and the US Department of Labor has it weekly unemployment claims, which have declined for five weeks. (FT, WSJ)

The UN Security Council is in session Diplomats are preparing for a confrontation between the USA and the Western powers condemn Russia about the invasion of Ukraine at the meeting, which is expected to be attended by the Minister of Foreign Affairs of Moscow, Sergei Lavrov.

NASA’s Asteroid Defense Mission The US space agency is holding a media briefing the world’s first test of the technology to protect the Earth from asteroids or comets. It should hit a non-threatening asteroid target on Monday.

FT Business Book of the Year The year’s most compelling and enjoyable modern business introductions have been shortlisted, with £30,000 awarded to the winner and £10,000 to each runner-up. Check out the long list here.

What else are we reading

What far-right Italy means for Europe Polls suggest Sunday’s general election will lead to a far-right government led by Giorgia Meloni of the relatively inexperienced Brothers of Italy party. While the leaders of the right-wing coalition may be fierce Eurosceptics, Rome and Brussels need a functional relationship.

UK current account deficit With the widening gap between consumption and production, the pound can only support its value if foreigners want to lend to the UK or buy assets such as land, housing or companies. But what happens when confidence falls?

Bitcoin is inseparable from crypto Why do “bitcoin maximalists” claim that bitcoin is not a cryptocurrency? One can understand why they might seek to distance themselves from the cryptoland scam. But their arguments do not hold, writes Jemima Kelly.

Britain’s Big Four supermarkets have problems with Aldi This time it was to be different, with Tesco, Sainsbury’s, Asda and Morrisons learning the lessons of the financial crisis. This downturn refers to high prices, not profits. But discount rivals Aldi and Lidl are growing rapidly, writes Kat Rutter Pooley.

Irish youth are looking abroad During the history of emigration, an estimated 10 million people have left the country since 1800. In the past, many of them were forced to leave due to famine and economic crises, young people now they are drawn to work abroad or the freedom of living in more open societies.

Food and drinks

Lobster Thermidor, Michelin-starred chefs and recipes with non-disclosure agreements: Take take a look inside the test kitchens of the world’s most experimental airlines.

The airline

As airlines increasingly scramble for profits, first-class meals are becoming more sophisticated and performative © Kenneth Lam

Ruined times — Documenting business and economic changes between Covid and conflict. Register here

Asset managementRegister here for the inside story on the movers and shakers behind the multi-trillion dollar industry

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