UBS Says Rogue Trader Caused $2 Billion Loss
MELISSA BLOCK, Host:
If you thought the reputation of bankers couldn't take any more knocks, that was proven wrong today. UBS, Switzerland's largest bank, confessed that one of its traders has lost roughly $2 billion. Yes, one trader, $2 billion. NPR's Philip Reeves picks up the story from London.
PHILIP REEVES: This is the stuff of every banker's nightmares: A rogue trader has somehow lost a couple of billion dollars in unauthorized deals. That, says Swiss banking giant UBS, is what's just happened. The markets were still absorbing this stunning news as Commander Ian Dyson of the City of London Police made this announcement.
IAN DYSON: At 1 a.m. this morning, the City of London Police were contacted by UBS about an allegation of fraud by one of their employees, and at 3:30 a.m., detectives from our force arrested a 31-year-old man on suspicion of fraud by abuse of position.
REEVES: Some analysts are wondering why after these two scandals plus the 2008 financial crisis, it's still apparently possible for a rogue trader to cause havoc. What happened to risk control? Louise Cooper, analyst for the financial firm BCG Partners, thinks this case is not about that.
LOUISE COOPER: Risk control is increased substantially at banks. I just think it's one of these situations where you have a rogue person, and if somebody wants to circumvent the rules, I don't think there's much you can do about it if they're smart, if they're motivated. It happens in all walks of life. It's in human nature to get around the rules.
REEVES: Did Kweku Adoboli, the UBS trader now under arrest, try to get around the rules? That's up to investigators and perhaps ultimately the courts to decide. If he did, it all went wrong. The last update to his Facebook page nine days ago simply says: need a miracle. Philip Reeves, NPR News, London.
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