Top 5 Credit Suisse Global Markets Interview Questions and Answers
Historically, Credit Suisse has had one of the stronger sales and trading franchises among the large European banks. Further, much like Deutsche Bank, Credit Suisse made a concerted effort over the past decade to expand out globally and strengthen its market share within the United States and Asia.
However, as you may know, Credit Suisse has been hit by numerous issues over the past few years. Most notable among them was taking a relatively large hit - along with other banks - on Archegos Capital, to the tune of over $5.5b. Further, the bank has also been embroiled in issues surrounding supply chain financing to Greensill Capital.
With all that being said, what I always tell people looking to break into the industry is that you should take any seat at a prominent investment bank that's offered to you. Because the reality is that as you get into your associate years, as long as you've developed a level of expertise in a certain product then you can move elsewhere relatively easily. Indeed, many on the equities desks of Credit Suisse have been poached by Barclays over the past year.
So, with all that being said let's run through some of the types of interview questions you can expect.
Credit Suisse Global Markets Interview Questions
Below are some questions that you could be asked in a Credit Suisse Global Markets (sales and trading) interview. Keep in mind that you won't be expected to give answers with the level of depth I've provided here -- although it'd be great if you do!
This is a question you're going to get during interviews anywhere. However, how you answer this question needs to change based on whether the bank runs a rotational program (like Goldman) or a fixed placement program (like JPM).
Credit Suisse runs a rotational program analogous to Goldman's, meaning that you'll do three rotations of three weeks. Further, like Goldman, they'll want you to not do all of your rotations within the same asset class (i.e., equities).
So when answering this question at Credit Suisse, you should say you have quite a bit of interest in a certain asset class, and as a result would like to explore a few desks there. However, you should also bring up your interest in a different asset class and a desk you're interested in within it. Then close your answer by saying part of why you're so interested in Credit Suisse is because you'll be able to have the opportunity to potentially rotate among all of these desks.
For example, you could say you're interested in equities so would like to explore Delta One and the equity derivatives desk. However, you can also say you're interested a bit in rates as well and would like to experience a more flow oriented desk like treasury (government bond) trading.
Note: How you answer this will be slightly contingent on what central bank you're being asked about (as the Fed is looking to raise rates quicker than the ECB is, for example).
However, if we're talking about the United States, what you should do is note how many hikes are being projected by the market over the coming year (as of this writing, it's seven 25bps hikes in the United States). You should also note whether the market is pricing in a more aggressive pathway than what the Fed itself is projecting, which you can see from the dot plots that the Fed publishes.
After laying this brief foundation, you should then give your own opinion. For example, you could say that while the Fed is more conservative in its forecasts, you think the market is correct in pricing in a more aggressive liftoff in rates. This is because you think that recent geopolitical tensions and supply chain disruptions will result in inflation being stubbornly persistent.
Further, you can note that the Fed has a dual mandate of maximum employment and price stability. While the Fed has updated how it interprets its inflation mandate to make it more flexible, by any measure inflation is running multiples over where the Fed should feel comfortable being.
As a consequence, as folks like Larry Summers argue, the longer the Fed allows inflation to run well above its mandate, the less credibility it will have in the eyes of market participants. This could lead to an inability to create a so-called soft landing, and instead could lead to the Fed needing to induce a recession via large and successive rate hikes in order to crush inflationary pressures. This would, obviously, be an extraordinarily bad outcome and cause a deep loss of confidence in the Fed both by market participants and the general public. As a result, you think the Fed will be forced to begin raising rates more aggressively than they currently are forecasting.
This is a pretty open-ended question, and there are quite a few potential answers you could give.
However, the obvious asset class that should come to mind are corporate bonds. This is because corporate bonds (i.e., investment grade or high yield bonds) are fixed rate. Thus as rates rise, the yields on bonds that have been issued at very low coupons over the past few years will rise sharply, which will lead to prices falling sharply.
Thus far in 2022, we've already seen this play out with the S&P High Yield Corporate Bond Index falling by roughly 6%.
If rates are going to rise at the pace that market participants expect - which is quite aggressive - then you'd expect to see corporate bond yields rise significantly, with a corresponding drop in prices. It doesn't help that throughout 2021 credit spreads were near all time lows, so yields have a lot of room to rise.
Here's a good article from the Wall Street Journal discussing the general theme of rising corporate credit yields.
This is another open-ended question that doesn't have an objectively correct answer. What this question is really trying to do is see how you think about the rise of oil impacting the wider economy.
So, the first thing to note is that if oil did rise this much, a recession would almost certainly occur (because every time, over the past fifty years, oil has risen 50% above trend there's been a recession to follow).
The reason behind this is multi-fold. But, for interview purposes, I'd point to three things.
First, while consumers can substitute away from oil to a certain degree (by driving less, for example) there is a certain level of oil that consumers need. Thus, when prices rise sharply, consumers tend to curtail spending elsewhere. In other words, aggregate demand retracts.
Second, consumer confidence always falls sharply when oil prices rise, as consumers suddenly feel less well-off. Consumer confidence falling leads to a reduction in spending and usually creates a "hunker down" mentality.
Third, oil is an essential input into vast swathes of the economy. So, oil prices rising will feed through to a myriad of products and feed into heightened inflation indirectly. Higher oil prices also create uncertainty for companies as well, as they need to decide whether to immediately pass through rising costs to consumers, or let their profit margins contract and absorb the costs themselves.
Another way this can all be said is that when oil prices rise sharply, it gums up the works of the global economy because consumers, corporations, and even governments begin to act in idiosyncratic and unpredictable ways.
This refers to a type of yield curve trade whereby you'll benefit from having the yield spread between the two-year treasury and the ten-year treasury compress or flatten over time.
So, if we think that this flattening will happen we can position our book by selling the 2yr treasury and buying the 10yr treasury. Because how we'll get a flattening between 2s10s is by having an increase in the 2yr yield or a decline in the 10yr yield or both occurring at the same time.
If you had put this trade on a year ago, you would have done quite well as we've had substantial flattening between 2s10s.
While it's no secret that Credit Suisse has faced challenges over the past few years, the reality is that it's still a great place to get a start in the industry (either to grow within the firm, or to pivot after a few years to another one).
Further, I'm a big fan of rotational programs so by going to Credit Suisse you'll get the opportunity to really find the desk that works for you.
If you're currently gearing up for interviews, and looking for even more questions, you can check out the big list of sales and trading interview questions or the sales and trading overview post. Alternatively, if you're looking for hundreds of questions like these - plus dedicated desk guides to help you get a feel for the S&T landscape - you can take a look at the sales and trading guides.
Hopefully this post has been helpful, and good luck!