A billion-dollar trading scandal rocked the Swiss banking giant UBS.
An employee of investment banking in London crumbled one of the largest Swiss bank, a loss in the trading of two billion dollars, as the UBS announced on Thursday. The financial institution can not exclude that it slips so in the third quarter in the red. UBS's management said in a Reuters this internal memo, however, the fundamental strength of the financial group is not affected by the loss. Bank analysts also looked like this: the bank was strong enough to digest the loss. UBS shares lost nearly nine percent and dropped to less than ten francs. The title of local rivals Credit Suisse segment increased to three percent. Customers had come to no harm, said
UBS.
London police arrested the meantime, according to UBS a 31-year-old bank employee suspected of fraud.
The man had laid criminal energy of the day, said a spokeswoman for the bank. In what area of investment banking and in what position the man was working, did not immediately explain the UBS. From the "Linkedin" website of the man, a popular mainly in the UK platform for the establishing of professional contacts, it is clear that he for Exchange Traded Funds (ETFs) was responsible.
The case is reminiscent of speculation, the French bank Societe Generale, which had been brought by the broker-dealer Jerome Kerviel in early 2008 to the brink of collapse.
Beyond the financial consequences of the affair hurt in the opinion of analysts, especially the reputation of the bank, which has only just recovered from the effects of the financial crisis and the tax dispute with the United States. Rich clients who had then lost confidence in the bank and taken in droves to escape began, just return. CEO Oswald Gruebel came into office with the avowed aim to regain trust. "Even if the sum is not so high, that's even more of a loss of confidence and reflects very badly on UBS 'trading analyst Claude Zehnder said of the Zurich Cantonal Bank. Gruebel have saved the bank after the financial crisis and does the job largely said Helvea-banking analyst Peter Thorne. Now come Carsten Kengeter, the chairman of the investment banking division, probably more under attack.
SPAR AFFAIR EATS AMOUNT OF REDUCTION OF JOBS IN 3500
Piquant this: The loss by the "unauthorized" transactions of the man as she described the UBS corresponds exactly to the two billion dollars that would save the bank by including job losses in the investment division.Following a profit slump in the second quarter, UBS will highlight approximately 3,500 jobs. The loss of the savings effect is now equal to zero first.
Kengeter division chief had revamped the investment banking business after the loss of billions of U.S. subprime mortgages and brought hundreds of new traders in the bank. The division now employs nearly 18,000 employees mainly in London and the United States. Kengeter could remain whether or not - in any case, heads would roll, said one analyst who declined to be named.
WHO MONITORS THE DEALER?
Although there was not clear how the alleged fraud has taken place in the individual, the scandal shows the view of London scientist Chris Roebuck, that all risk-systems are not able to prevent an individual - particularly in investment banking - can be bypassed by the system when he it creates it. Whether the firm's risk management had gaps is not yet clear. The Swiss banking supervision FINMA said they had been informed immediately of the loss of billions. "We are aware of the case," said a spokesman.
The incident also nourishes the debate over whether Swiss banks even need a big investment banking or should only focus on asset management. "The announcement today adds to the long list of arguments to a substantially smaller investment bank is another," it said in a market note from Goldman Sachs, some politicians want the big banks more forcefully to curb them, the investment banking because of the high stakes involved and the prohibit all there usual high bonuses.
Coincidence or not, on Thursday began deliberations in Parliament in Bern on a new banking law with sharp capital requirements. Now you can certainly apply as what was already apparent: the Parliament will pass the bill by a large majority.
An employee of investment banking in London crumbled one of the largest Swiss bank, a loss in the trading of two billion dollars, as the UBS announced on Thursday. The financial institution can not exclude that it slips so in the third quarter in the red. UBS's management said in a Reuters this internal memo, however, the fundamental strength of the financial group is not affected by the loss. Bank analysts also looked like this: the bank was strong enough to digest the loss. UBS shares lost nearly nine percent and dropped to less than ten francs. The title of local rivals Credit Suisse segment increased to three percent. Customers had come to no harm, said
UBS.
London police arrested the meantime, according to UBS a 31-year-old bank employee suspected of fraud.
The man had laid criminal energy of the day, said a spokeswoman for the bank. In what area of investment banking and in what position the man was working, did not immediately explain the UBS. From the "Linkedin" website of the man, a popular mainly in the UK platform for the establishing of professional contacts, it is clear that he for Exchange Traded Funds (ETFs) was responsible.
The case is reminiscent of speculation, the French bank Societe Generale, which had been brought by the broker-dealer Jerome Kerviel in early 2008 to the brink of collapse.
Beyond the financial consequences of the affair hurt in the opinion of analysts, especially the reputation of the bank, which has only just recovered from the effects of the financial crisis and the tax dispute with the United States. Rich clients who had then lost confidence in the bank and taken in droves to escape began, just return. CEO Oswald Gruebel came into office with the avowed aim to regain trust. "Even if the sum is not so high, that's even more of a loss of confidence and reflects very badly on UBS 'trading analyst Claude Zehnder said of the Zurich Cantonal Bank. Gruebel have saved the bank after the financial crisis and does the job largely said Helvea-banking analyst Peter Thorne. Now come Carsten Kengeter, the chairman of the investment banking division, probably more under attack.
SPAR AFFAIR EATS AMOUNT OF REDUCTION OF JOBS IN 3500
Piquant this: The loss by the "unauthorized" transactions of the man as she described the UBS corresponds exactly to the two billion dollars that would save the bank by including job losses in the investment division.Following a profit slump in the second quarter, UBS will highlight approximately 3,500 jobs. The loss of the savings effect is now equal to zero first.
Kengeter division chief had revamped the investment banking business after the loss of billions of U.S. subprime mortgages and brought hundreds of new traders in the bank. The division now employs nearly 18,000 employees mainly in London and the United States. Kengeter could remain whether or not - in any case, heads would roll, said one analyst who declined to be named.
WHO MONITORS THE DEALER?
Although there was not clear how the alleged fraud has taken place in the individual, the scandal shows the view of London scientist Chris Roebuck, that all risk-systems are not able to prevent an individual - particularly in investment banking - can be bypassed by the system when he it creates it. Whether the firm's risk management had gaps is not yet clear. The Swiss banking supervision FINMA said they had been informed immediately of the loss of billions. "We are aware of the case," said a spokesman.
The incident also nourishes the debate over whether Swiss banks even need a big investment banking or should only focus on asset management. "The announcement today adds to the long list of arguments to a substantially smaller investment bank is another," it said in a market note from Goldman Sachs, some politicians want the big banks more forcefully to curb them, the investment banking because of the high stakes involved and the prohibit all there usual high bonuses.
Coincidence or not, on Thursday began deliberations in Parliament in Bern on a new banking law with sharp capital requirements. Now you can certainly apply as what was already apparent: the Parliament will pass the bill by a large majority.
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