Switzerland’s UBS reports $2 billion loss from unidentified rogue trades
Investors and Swiss politicians call for downgrade, or closure of UBS’s investment banking activities following rogue trades that may force the bank to declare a Q3 loss. September 16, 2011 | Tiah Wen LiJust one day after Moody’s downgrades France’s two biggest banks, Societe Generale and Credit Suisse, investors and Swiss politicians are now calling for a downgrade, or even closure of Switzerland’s UBS investment banking activities. This comes as the bank announced that it has just discovered a loss caused by an unauthorised trader at its investment bank. The bank said in a statement, “This matter is still being investigated, but UBS’s current estimate of the loss on the trades is in the range of $2billion.” In the statement, UBS also admitted that it may be forced to report a loss for the third quarter of 2011 due to the unauthorised trade. The bank however was quick to assure clients that their positions have not been affected. What is worrying is that bank officials have yet to be able to identify where the unauthorised trades had taken place or when they had occurred. They’re not even sure when more information will be available to the public. The incident opens up the not-yet-healed wound of 2008’s global financial crisis when the group had to write off more than $50 billion of toxic assets, forcing the state to bail it out. The investment arm of the bank had just begun to regain investor confidence and this announcement is sure to anger many, as stocks dip by 5.8% and more jobs, about 5% of the total workforce, is slashed. ... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: Operational Risk, Risk and RegulationOprisk,Risk and Regulation, Operational Risk,Risk and Regulation, Keywords:UBS, Switzerland, Rogue Trade UBS, Switzerland, Rogue Trade
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