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Our 2022 report featured much discussion of the travails at Credit Suisse, and included an article by Brad Karp, Chairman of US law firm Paul Weiss and lead author of a report, commissioned by the Credit Suisse board, that summarized findings of an internal investigation into events surrounding the firm’s costly exposure to Archegos. [See the 2022 Good Counsel Article Lessons Learned from the Archegos Default] Merely implementing “the right risk architecture” is insufficient, Karp wrote. A strong risk culture is central to assuring that risk managers, “are not only empowered to critically evaluate counterparty risk and escalate matters of concern to executive management or the Board of Directors, but that they do so.” In short, risk management is effective only when underpinned by the requisite cultural and behavioral imperatives. Instead, at Credit Suisse Karp had found:
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