UBS - Mahony Partners

Sep

2011

UBS: Pressure mounts after trading loss

Financial Services, Taking & Managing Risk

Today’s press coverage of the continuing drama at UBS suggests the saga is playing out in predictable fashion, as rivals seek to poach UBS deal-makers, whose bonuses are likely to shrivel following the bank’s losses. And speculation is mounting that CEO Oswald Gruebel will have to step aside. The situation has been made worse by UBS’s reluctance to move aggressively, along the lines I recommended in a Read More

Sep

2011

Friday Risk Reading: Advice on financial risk management from 15 years ago

Financial Services, Friday Risk Reading, Taking & Managing Risk

In light of the startling $2 billion trading loss that UBS reported this week, my Friday Risk Reading selection is a speech from 1996 by New York Fed President William J. McDonough. As president of the New York Fed from 1993 to 2003, when he was succeeded by Tim Geithner, McDononugh spoke often about bank safety, financial innovation and the impact of technology on banking. In 1996, he addressed a conference on Latin American banking in Buenos Aires and outlined the basic elements of sound risk manageme... Read More

Sep

2011

Silence reigns at UBS after trading debacle

Financial Services, Taking & Managing Risk

UBS has remained oddly silent since its brief press release announcing a $2 billion loss from unauthorized trades in London. The announcement chopped some $5 billion from the bank’s market cap, and neither CEO Oswald Grübel nor any other senior executive has addressed the matter. It’s instructive to compare UBS’s public response to that of other banks involved in similar situations. When Jérôme Kerviel’s trades racked up losses of $7.2 billion for Société Générale, its CEO, Daniel Bouton, faced the cameras and the critics head-on. He appeared at a press co... Read More

Sep

2011

The 3 things UBS must do

Financial Services, Taking & Managing Risk

Today’s stunning announcement by UBS that a rogue trader lost $2 billion presents big communications challenges for the Swiss bank. It will need to be forthcoming with regulators about the reasons for the loss and the breakdown in the bank’s internal controls. It must reassure private clients that their assets are safe, keep valued employees from fleeing and address investor concerns about the scale of risk-taking in the investment bank – all while trying to rebuild its businesses during a very rocky time in the markets. Clearly UBS has to answer some very tough questions abo... Read More