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Banking

Mathis Cabiallavetta: The tragic hero of UBS

Is Mathis Cabiallavetta the Othello of the financial markets - a man who loved "not wisely but too well"? Dirk Schütz, author of the first history of the SBC/UBS merger, (Der Fall der UBS published by Bilanz), certainly blames Cab's loyalty for the quality of people he collected round him as he rose to the top of UBS.

"How else can you explain why he entrusted his trading division, the only one in the bank to take on life-threatening risks, to his climbing chum Werner Bonadurer, who admittedly got further than him in ice hockey but had no trading experience?" Risk control was left to his "long-standing workmate" Werner Zimmermann. And his CFO was Felix Fischer, "honest and industrious, but no academic and almost without foreign experience".

Schütz relates how and why UBS fell into the arms of SBC last December. Poor risk control of Ramy Goldstein's equity derivatives division is confirmed as a major cause. Zimmermann and UBS's risk systems couldn't cope, so Cab hired Andrew Wright from Morgan Stanley in 1993 as a separate risk controller, but unfortunately didn't heed his persistent warnings. That would have meant firing Zimmermann. Wright was ignored by Bonadurer too and left in March 1997.

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