Brady Dougan, who led Credit Suisse Group AG through the financial crisis that began in 2008, said higher interest rates pose one of the biggest threats to markets.
“We have all very much adjusted to the new normal of very low or negative interest rates,” Dougan, 55, said in an interview with Bloomberg Television’s Manus Cranny. “The pace and the impact of interest-rate changes, ultimately, I think, may be one of our bigger issues.”
The US-born Dougan, a 25-year Credit Suisse veteran, is to leave at the end of the month after eight years as chief executive.
He is to be replaced by Tidjane Thiam, 52, the former chief exectuive of Prudential PLC.
Central banks in the US and Europe have held benchmark rates at record lows and flooded markets with cheap funds to encourage economic recovery.
That pushed bond yields below zero in some nations and bolstered stocks markets.
Even though everyone knows the US Federal Reserve is likely to raise benchmark rates sooner or later, “it is going to be hard for people to adjust” when it happens, Dougan said.
A Fed increase this year is possible, but later is more likely, Dougan estimated.
The IMF last week urged Fed Chair Janet Yellen to wait until next year before raising rates to preserve the strength of the US economy.
impact of uk eu exit
The possibility that Britain could leave the EU is also a risk that “every manager of a business has to take into account,” Dougan said. “There is no question about that. It would not be responsible not to [prepare].”
British Prime Minister David Cameron has pledged to hold a referendum on EU membership by the end of 2017.
The first US citizen to serve as sole chief executive of Credit Suisse, Dougan guided Switzerland’s second-largest bank through the meltdown that followed the collapse of Lehman Brothers Holdings Inc, without a government bailout.
In recent years, he has faced growing criticism from some investors for not following UBS Group AG by cutting the investment bank more aggressively.
Investment banking will keep evolving over the next decade in response to regulation, technology and changes in the structure of markets, Dougan said, and tougher rules would force more banks to exit business lines as profitability shrinks.
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