WHY is this sort of trading, "normal" & legal in banking?
This is a problem, they are gambling with other peoples money. And when they "lose" they fire employess, NOT those that make these decisions & created the loss, the regular employee doing their job. grrr clo
UBS Raises Loss to $2.3B; Gruebel Staying
By Thomas Mulier - Sep 19, 2011 3:54 AM ET
UBS AG (UBSN), Switzerland’s biggest bank, said its loss from unauthorized trading amounted to $2.3 billion, more than initially reported, while Chief Executive Officer Oswald Gruebel dismissed calls to step down.
The loss, first estimated on Sept. 15 at $2 billion, came from trading in Standard & Poor’s 500, DAX and EuroStoxx index futures over the past three months, the Zurich-based bank said in an e-mailed statement yesterday. UBS made the latest disclosures two days after London police charged a 31-year-old trader with fraud and false accounting.
“The positions taken were within the normal business flow of a large global equity trading house as part of a properly hedged portfolio,” UBS said in the statement. The magnitude of the risk was masked by “fictitious positions,” it said.
Jobs ‘Under Scrutiny’
UBS had to raise more than $46 billion in capital from investors, including the Swiss state, to make up for the record losses during the credit crisis. The bank’s tier 1 capital at the end of the second quarter was 37.39 billion francs ($42.5 billion), giving it a tier 1 capital ratio of 18.1 percent.
The investment-banking unit had pretax earnings of 1.21 billion francs in the first half of 2011, while UBS as a whole had net income of 2.82 billion francs in the period.
UBS said last month it will eliminate about 3,500 jobs, with about 45 percent of the reductions coming from the investment bank, as stricter capital requirements and market turmoil hurt the earnings outlook. The bank in July scrapped the target of doubling pretax profit from last year’s level to 15 billion francs by 2014.
for complete:
http://www.bloomberg.com/news/2011-09-18/ubs-estimates-loss-from-unauthorized-trading-at-2-3-billion.html
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