Abigail with attitude: As a rogue trader undoes UBS, why are we paying regulators and risk managers?
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Abigail with attitude: As a rogue trader undoes UBS, why are we paying regulators and risk managers?

The Abigail with attitude column calls for the dismissal of anyone involved with the regulation of UBS’s investment bank.

‘Swiss’ and ‘staid’ are no longer two words that you can link, if a third word, ‘bank’, is present. The management of UBS must hope that investors don’t decide that ‘secure’ is another word that they do not want to associate with ‘Swiss’.

The news last week that UBS had managed to lose $2.3 billion because of the alleged activities of a rogue junior trader sent shock waves through the banking industry. Market participants could not comprehend how in this age of ‘regulator rules all’ such a pernicious event could occur. The Abigail with attitude column calls for the dismissal of anyone involved with the regulation of UBS’s investment bank, whether in London or Zurich. This is a colossal failing of risk management and regulation. How can one individual be allowed to carry out trades that expose the institution to such extensive losses? UBS points to the fact that Kweku Adoboli, a trader on its Delta One desk, was acting fraudulently. But he was obviously dealing in huge amounts. And surely any risk function has to take into account the possibility of fraud when compensation is linked to profitability? It seems pretty basic to me.

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