Credit Suisse chairman may leave Swiss Re

Credit Suisse's new chairman Mr Walter Kielholz is expected to step down as chief executive of Swiss Re following his appointment this week to the troubled Swiss bank.

The move would be unlikely to take effect until the end of December, bankers in Zurich said yesterday. However, it would help to reassure Credit Suisse investors, who are concerned at the stability of the new management structure announced this week with the ousting of Mr Lukas Muhlemann, chairman and chief executive.

The bank said Mr Kielholz would take on the chairmanship of Credit Suisse in addition to his role as Swiss Re chief executive.

The chief executive's role will be held jointly by two fiercely independent individuals - Mr John Mack, who runs the investment bank, and Mr Oswald Grubel, who heads the division that includes other banking operations and the beleaguered Winterthur insurance business.

Mr Kielholz is to take up his role at Credit Suisse in January. He refused to be drawn on his plans this week but said the Swiss Re board would have to address the question of his future role.

Speaking one day after a top-level shakeup at Switzerland's second-largest financial group, Mr Kielholz said Credit Suisse needed a stringent workout and not radical surgery to get back into shape.

He acknowledged the failure of his predecessor's strategy, which led Credit Suisse deep into insurance and investment banking, but fell short of prescribing a new structure for the sprawling group.

Mr Kielholz downplayed speculation that the group would seek a buyer for loss-making Winterthur or ailing investment banking arm Credit Suisse First Boston (CSFB), even as US prosecutors bore down on CSFB in a fraud probe.

"In Switzerland we have great synergies in the life insurance business, above all with the retail business," he told Tages-Anzeiger newspaper, adding that CSFB was "absolutely not" for sale.

Massachusetts state regulators recommended on Thursday that New York State Attorney General Mr Eliot Spitzer bring criminal charges against CSFB over its stock research, in a long-running probe.

Mr Spitzer has not decided how to proceed, a spokeswoman said.

Regulators have been investigating conflicts of interest at CSFB as part of a multistate probe into Wall Street analysts.