While the solution we have come up with may not be ideal for everyone, we believe it strikes the appropriate balance among the interests of our employees, shareholders and regulators and helps position us well for 2009.
It's wickedly brilliant. Credit Suisse takes $5 billion in questionable assets off its books, which immediately benefits shareholders. Publicly, it looks like the bankers are being punished with the toxic junk they made a fortune selling, which satisfies regulators and a bloodthirsty public.
And in reality? The bankers are getting bonds, derivatives, and other instruments whose value has already been discounted by 35 percent — a loss borne by Credit Suisse investors. If they rebound, Credit Suisse's moneymen will end up getting more than $5 billion. But that scenario assumes that the credit markets unfreeze and housing prices recover — at which point no one will be calling for guillotines on the streets of lower Manhattan. Wall Street always finds a way.