The Swiss-based bank UBS has agreed to a settlement with Mozambique to resolve Credit Suisse’s infamous ‘tuna bond’ scandal.
The story goes that Credit Suisse, which UBS absorbed in June, was involved in loaning Mozambique $2.4B in 2013 to purchase a fleet of coast guard and fishing vessels from a company in the UAE.
But the lending program was faulty and plagued by corruption among both bankers and shipbuilders, and Mozambique was unable to pay Credit Suisse back. Huge sums of cash went missing.
So, when the IMF and other international lenders found out in 2016, they halted their own lending, and the country’s economy collapsed.
Intrigue’s take: Lenders have power. Multilateral lenders try to intermediate that power across bureaucracies geared (at least in theory) towards transparency and accountability. But this often means things move slowly.
Private lenders, on the other hand, can move quickly, but this Credit Suisse case is a reminder that speed can cost you transparency and accountability.
Also worth noting: