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The NHS Swiss Banking Scandal

EXCLUSIVE: Tribune can reveal that the NHS’s Tory-appointed chair Richard Meddings was a key figure in disgraced banking giant Credit Suisse, chairing its risk committee before a series of financial scandals destroyed it last week.

Chair of NHS England Richard Meddings chaired Credit Suisse’s risk committee before the bank collapsed. (Neilson Barnard/Getty)

The Conservative-appointed chairman of the NHS is also a board member of  Credit Suisse, directing the giant Swiss bank which collapsed this week following financial scandals, Tribune can reveal.

Senior Tory and ex-banker Sajid Javid made current banker Richard Meddings the chair of NHS England in January 2022. In his capacity as Secretary of State for Health and Social Care, Javid said that Meddings ‘brings to the role a wealth of experience’, including ‘years of management in the financial services industry’, giving him a mandate to ‘change and reform’ the health service. 

But less highlighted was Meddings’ role in the board of Credit Suisse, which collapsed last week and saw itself taken over entirely by UBS over the weekend. The bank was offered a $54 billion bailout by the Swiss National Bank at the first hint of trouble. But this massive government-backed support was not enough to save the 167-year-old institution, which was instead taken over by its rival Union Bank of Switzerland this week.

Risk Culture

The immediate cause of Credit Suisse crisis was the nervousness of international financial institutions following the collapse of America’s Silicon Valley Bank (SVB). The financial contagion this caused impacted Credit Suisse particularly badly because of its well-known problems with risk. 

Last year Credit Suisse was forced to admit the bank had identified ‘material weaknesses’ in internal controls over financial reporting, stating that ‘management did not design and maintain an effective risk assessment process to identify and analyse the risk of material misstatements in its financial statements.’

The admission of potentially erroneous reporting may have spooked the markets, but it also came on top of other dubious dealings. Between 2017 and 2021, for example, Credit Suisse encouraged and arranged for clients to invest in British financial services company Greensill Capital. 

In 2021, Greensill—which also employed former Tory prime minister David Cameron—collapsed amid allegations of financial misbehaviour and fraud. Even as late as last month, the Swiss financial regulator ruled that Credit Suisse had ‘seriously breached its supervisory obligations’ in its relationship with the company’s owner, Lex Greensill, and his operations. They wracked up around $10 billion of investment in Greensill, of which up to $2 billion may have disappeared.

On top of this, Credit Suisse also heavily backed Archegos Capital Management, a US investment firm whose 2021 implosion left Credit Suisse with $5.5 billion in losses. Archegos’ founder and manager, Bill Hwang, is currently facing US charges of fraud and racketeering. 

In Credit Suisse’s own investigation into the debacle, they were forced to admit that ‘significant deficiencies’ in their ‘risk culture’ owed to a focus on ‘maximising short-term profits’ and ‘failed to rein in and, indeed, enabled Archegos’ voracious risk-taking’—despite also conceding there was ‘numerous warning signals’ at the time.

All in all, Credit Suisse’s own investigation published last July found they displayed a ‘lackadaisical attitude towards risk and risk discipline; a lack of accountability for risk failures; risk systems that identified acute risks, which were systematically ignored by business and risk personnel; and a cultural unwillingness to engage in challenging discussions or to escalate matters posing grave economic and reputational risk.’

These errors have been instrumental in bringing about Credit Suisse’s downfall. But they have concerning reverberations for the British health service, since Meddings was not only on the bank’s board during this period, but chaired its Risk Committee.

The Risk Committee is an internal body tasked with assisting Credit Suisse’s board with analysing and alerting bank bosses to potential future issues that could hamper day-to-day operations. Despite the bank’s own investigation suggesting that ‘risk personnel’ had failed to properly scrutinise bad behaviour, Meddings continued as chair of the committee into 2022.

That may now be a decision the company regrets. Observers and former staff at the bank say Credit Suisse continuously allowed executives chasing higher returns from riskier deals to override their ‘risk departments’—despite the potential risks.

NHS ‘Reform’

When he was appointed, Sajid Javid said Meddings would give his £63,000 NHS salary to charity. This was designed to reassure voters but was a product of his lucrative banking sector salary and left questions unanswered about how committed Meddings would be to the new role.

Tribune asked the Department for Health if Meddings would continue to donate his salary to charity even if he lost his Credit Suisse job, as is probable in the wake of the bank’s demise. The Department simply stated, ‘Richard Meddings was appointed chair of NHSE in March 2022 following a fair and open competition, supported by the Health and Social Care Select Committee’. 

It’s true that Meddings’ appointment was approved by MPs on the Health Committee—but even while approving the appointment, their Conservative Chairman, Jeremy Hunt, was forced to express reservations. In 2022  Hunt said:

‘His performance at certain points of our pre-appointment hearing was not strong with particular weakness on social care, an area he will need to get up to speed with quickly’ and said that supporting his appointment ‘was not a unanimous view of the Committee.’

The Department told Tribune that Meddings was still the right man for the job despite his involvement in the Credit Suisse debacle because ‘He has a wealth of experience in both the public sector, serving seven years on the Board of HMT (His Majesty’s Treasury), and across a number of FTSE private sector financial services companies, that he has brought to NHSE, and has played a leading role in helping the NHS recover from the pandemic.’

Javid supported Medding’s appointment because he believed that his experience in banking would give him a unique ability to ‘reform’ and redirect the NHS. It was also an attempt to rehabilitate bankers as figures capable of leading the administration of health systems and other vital public services, after the reputational damage the profession took in the wake of the 2008 Financial Crash. 

But yet again, the conduct of bankers and poorly regulated financial institutions—signalled in this year’s multinational crises—show us that public antipathy remains largely justified. It is concerning that someone who played such a significant role in this financial calamity is chair of the NHS at a time of deep crisis. 

And it begs a further question: do figures deeply embroiled in the global banking casino really have the interests of Britain’s public health system at heart?