There are times when the oldest jokes sound quite fresh. I am thinking of the one about the neophyte banker who visits a tailor to be fitted with a new suit. When he returns a week later to collect it, he discovers to his surprise that the pants are without pockets. “You told me you were a banker,” explained the tailor. “Whoever heard of a banker with his hands in his own pockets?”
By their own actions, the banks themselves do little to curb this sort of bitter humor; since the systemic financial crisis of 2008, bankers have consistently ranked among the most loathed of professions. The present bleak economic outlook — rooted in instability in the banking sector — suggests that little will change on that front.
The latest bank to remind us of the utter lack of ethics in this industry is Switzerland’s Credit Suisse, one of 30 banks around the world identified by the U.S. government as critical because of the risks to the broader economy in the event of its collapse. In March, Credit Suisse was bought out by its larger Swiss rival, UBS, for the knockdown price of $3.25 billion after its shares plunged and depositors started to panic. The deal would not have been sealed without the intervention of the Swiss government, which was terrified of both Credit Suisse’s imminent implosion and the rebound effect on the already murky reputations of Swiss banks. As Alain Berset, the president of the Swiss Confederation, put it: “An uncontrolled collapse of Credit Suisse would lead to incalculable consequences for the country and the international financial system.”
This notion of “too big to fail” has enabled the banks to continue taking grave risks with their depositors’ money. In the case of Credit Suisse, shady practices have been a hallmark since the bank’s foundation in the 1850s. And like most Swiss banks, it is Credit Suisse’s record during the Nazi era that unmasks this institution’s true nature better than any other episode in its history.
The collusion of the banks in “neutral” Switzerland with Hitler’s regime — one of the most nauseating aspects of World War II—resulted in a historic $1.25 billion settlement in 1999 with Holocaust survivors and their relatives whose assets had been stolen, hidden or illegally transferred to Nazi account holders. But as much as the bankers wished for that agreement to be the last word on the matter, it was not.
More than three years ago, the issue of collaboration with the Nazis returned with a vengeance when the Simon Wiesenthal Center (SWC) announced the discovery of a list of 12,000 Nazis who moved to Argentina, many of whom had contributed to bank accounts at the Schweizerische Kreditanstalt, which later became Credit Suisse. In a March 2020 letter to Credit Suisse vice president Christian Küng, the SWC stated: “We believe it very probable that these dormant accounts hold monies looted from Jewish victims, under the Nuremberg Aryanization laws of the 1930s. We are aware that you already have claimants as alleged heirs of Nazis in the list.”
In response to the SWC’s allegations, Credit Suisse launched an internal investigation headed by two independent figures: Neil Barofsky, a prominent lawyer from New York; and Ira Forman, who served as U.S. Special Envoy for Combating Antisemitism under the administration of former President Barack Obama. But because the bank wasn’t happy with what the investigators discovered, Barofksy and Forman were fired last November. That, in turn, led the SWC to alert Iowa Sen. Chuck Grassley, the top Republican on the U.S. Senate’s Budget Committee, in February. Last week, the committee released two reports on the controversy; one by Barofsky, the other giving the bank’s own version of events.
Grassley was under no illusions as far as assessing Credit Suisse’s attempts to muddy the historical record. “When it comes to investigating Nazi matters, righteous justice demands that we must leave no stone unturned,” Grassley said in a statement. “Credit Suisse has thus far failed to meet that standard.”
A separate statement from the Budget Committee, which was compelled to issue a subpoena in order to obtain Barofsky’s report, noted that Credit Suisse’s General Counsel placed the investigation on hold in June 2022 after learning of Barofsky’s findings before removing him altogether later that year. It also criticized Credit Suisse’s research methods, saying that the bank “did not review and investigate all relevant records and did not use a full dataset of the bank’s predecessor entities for portions of its review.” And as Barofsky told The New York Times last week, key questions “about the thoroughness of [Credit Suisse’s] prior investigative efforts, the extent to which it served Nazi interests and the banks role in servicing Nazis fleeing justice after the war,” remain unanswered.
As far as Credit Suisse is concerned, however, the time has come to draw a line under the SWC’s allegations. Its own report accused Barofksy of “numerous factual errors, misleading and gratuitous statements and unsupported allegations that are based on an incomplete understanding of the facts,” before concluding: “After a thorough consideration of the findings regarding the Nazi period, which supplement but do not materially alter the information already available in the published historical record, Credit Suisse has concluded that no further measures are currently warranted regarding the issues that the SWC has raised.”
No U.S. legislator should surrender to Credit Suisse’s efforts to close the door on any further inquiries, let alone compensation for Jewish victims of the bank’s policy of aiding fleeing Nazis. It is now the responsibility of UBS to face up to the obligations it took on when it purchased Credit Suisse. If the bank’s executives will not do so of their own accord, then our lawmakers have a duty to compel them — for the sake of transparency, for the sake of the integrity of our financial system, but most of all, for the sake of those who were murdered just because they were Jews.
Ben Cohen is a New York City-based journalist and author who writes a weekly column on Jewish and international affairs for JNS. This originally ran on JNS.org.