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09-18-2011, 09:50 AM   #1
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UBS 'rogue trader': Loss estimate raised to $2.3bn

QuoteQuote:
UBS has raised its estimated losses due to alleged unauthorised trading to $2.3bn (1.5bn) from an initial $2bn.
...
The UBS statement claimed Mr Adoboli had conducted legitimate derivative transactions, giving the bank heavy exposure to various stock market indexes.
...
The Financial Services Authority (FSA), the City regulator, in conjunction with its Swiss counterpart, FINMA, has launched an investigation into why the Swiss bank did not identify the trades.
UBS said in its latest statement that it too had launched an internal inquiry.
...
Moody's says it is reviewing UBS's rating, focusing on "ongoing weaknesses" in the Swiss bank's risk management.
It comes after UBS lost 35bn in the 2007-8 banking crisis and had to be bailed out by Swiss taxpayers.
...

BBC News - UBS 'rogue trader': Loss estimate raised to $2.3bn

09-18-2011, 10:14 AM   #2
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This kind of stuff amazes me. $2.3 billion isn't petty cash. A bank that has so little oversight of it's traders that he could blow this much money deserves to suffer the consequences. However once again the "too big to fail" issue will once again be raised and probably they will get bailed out. A least this time it isn't a US bank so the European's can start bitching and moaning too.
09-18-2011, 10:32 AM   #3
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That's part of the problem.
To these people it is petty cash!

They just found a fall guy.
The rape of the value of America continues unchecked.
09-18-2011, 11:44 AM   #4
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From the NYT article Gene pointed out in the other thread

QuoteQuote:
Finance plays with other people’s money: financial disasters damage people and businesses who never participated in the fatal transaction. For that reason, financial firms are justly regulated in ways that other firms are not.
Post-Tea-Party Nation - NYTimes.com

When things go wrong other people's money may include that of the taxpayer's. When things really go wrong the result is a recession or even a depression. Banks are a part of the infrastructure that the rest of the economy depends on. They must operate at low risk, which equals meager profits. If/when banks are making high profits it means that they are taking high risks (and/or abusing their position as infrastructure).

09-24-2011, 10:38 PM   #5
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QuoteQuote:
The exit of Oswald Gruebel as chief executive of UBS became inevitable when the group uncovered a 1.5bn loss on alleged unauthorised trading some 10 days ago.
For a group whose culture is supposed to be of prudence and conservatism, and which has let itself down so badly so many times in the past three years, the embarrassment demanded that responsibility was taken at the very top.
...
In spite of pressure in UBS's home country of Switzerland for the investment bank to be hived off, the board of UBS has decided that the investment bank would be retained and that UBS would remain a universal bank. But that does not mean UBS's investment bankers can breathe a sigh of relief - the board authorised a radical reconstruction of the investment bank.
Gloomy forecast UBS's investment bank will be shrunk significantly - it will take less risk, have a smaller balance sheet and use less capital. It will also concentrate exclusively on providing services to clients, rather than trading for its own account
BBC News - UBS hopes small is less risky

related:

QuoteQuote:
The most radical reform of British banks in a generation, and possibly ever, has today been proposed by the Independent Commission on Banking, set up by the Treasury.
What is recommended is as close to a formal break-up of Britain's biggest banks as it is possible to get without obliging the likes of Barclays and Royal Bank of Scotland to physically separate their retail and investment banking operations.
In that sense, the reforms are at least as significant for the City of London as Big Bang was in 1986, when banks were allowed to buy stockbrokers. Arguably there has been nothing quite as significant for banks in more than a century.
All of Britain's leading banks would have to put their retail banking operations behind a new ring fence or firewall. This means that vital services for small businesses and individuals, looking after their deposits, making loans to them, and moving money around, would be in these new ring-fenced subsidiaries.
...
Outside the ring fence would be what the commission calls "global wholesale/investment banking", such as trading in securities and derivatives.
BBC News - Banks face biggest shake-up for decades
09-30-2011, 09:24 AM   #6
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Perhaps they are not so much rogues, as they are full on crazy!!!!


Going Rogue: Share TradersMore Reckless Than Psychopaths, Study Shows - SPIEGEL ONLINE - News - International
10-06-2011, 02:24 AM   #7
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BBC News - UBS prepares 'disciplinary action' as more heads roll
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