In scenes reminiscent of the bewigged slap-stick reality TV's 'Apprentice', UBS's Oswald Gruebel quit as CEO immediately after the public disclosure of a substantial loss from an unauthorised trade in a London-based equity division. The question of where the buck stops becomes interesting if not a little contentious........ ?
Take today's UBS AG 3rd-quarter results as a point of departure. Net income for the period: $1.16 billion. Tier 1 Capital ratio: 18.4%. Wealth Management & Swiss banking earnings: up 67%. Notwithstanding the once-off accounting-gain and the sale of sovereign treasuries those results are pretty impressive...
Now, if falsified reports which resulted in the unauthorised trading loss in London did in fact trigger internal risk controls and they weren't sufficiently investigated or escalated then logic dictates that the fault lies not in the system itself but with the front-line staff responsible for compliance. As it turns out both line-head managers have subsequently tendered their resignations.
At face value and if these results are anything to go by, it's impossible to fault Gruebel's vision or strategic performance. Expanding the trade-loss witch-hunt and implying the same inconsistencies to the Group CEO as its logical conclusion, smacks of an undisclosed agenda not necessarily in the best interests of shareholders. Time will tell.
Take today's UBS AG 3rd-quarter results as a point of departure. Net income for the period: $1.16 billion. Tier 1 Capital ratio: 18.4%. Wealth Management & Swiss banking earnings: up 67%. Notwithstanding the once-off accounting-gain and the sale of sovereign treasuries those results are pretty impressive...
Now, if falsified reports which resulted in the unauthorised trading loss in London did in fact trigger internal risk controls and they weren't sufficiently investigated or escalated then logic dictates that the fault lies not in the system itself but with the front-line staff responsible for compliance. As it turns out both line-head managers have subsequently tendered their resignations.
At face value and if these results are anything to go by, it's impossible to fault Gruebel's vision or strategic performance. Expanding the trade-loss witch-hunt and implying the same inconsistencies to the Group CEO as its logical conclusion, smacks of an undisclosed agenda not necessarily in the best interests of shareholders. Time will tell.
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