UBS bankers face probe on past mistakes and standards

LONDON/ZURICH Wed Jan 9, 2013 12:06am GMT

The offices of Swiss bank UBS are seen in the financial district of the City of London October 31, 2012. REUTERS/Chris Helgren

The offices of Swiss bank UBS are seen in the financial district of the City of London October 31, 2012.

Credit: Reuters/Chris Helgren

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LONDON/ZURICH (Reuters) - UBS's investment banking and risk management bosses will be quizzed by British parliamentarians on Wednesday on standards and controls at the Swiss bank after a string of scandals.

Andrea Orcel, investment bank chief executive since November after joining as co-CEO in July, heads a trio of executives who will appear before a parliamentary commission after UBS was fined $1.5 billion (933.9 million pounds) last month for rigging Libor interest rates.

In recent years, UBS has also been hit by a $2.3 billion rogue trading loss, about $50 billion of U.S. mortgage-related losses, and a damaging tax avoidance row with U.S. authorities.

Italian Orcel will be joined by chief risk officer Philip Lofts and Andrew Williams, global head of compliance.

UBS's Libor fine was the second biggest financial fine ever on a bank and more than three times the penalty imposed on Barclays in June for the same offence - an event which prompted Britain to set up its inquiry, the Parliamentary Commission on Banking Standards.

Orcel - previously at Merrill Lynch where he was slammed for taking a $34 million pay package in 2008 after advising on the disastrous RBS-led takeover of ABN AMRO - is leading a business which saw 10,000 jobs axed and a retreat from fixed income announced on the day he took the helm in November.

Some analysts say the revamp may not have gone far enough - UBS may need to axe another 2,000-3,000 investment banking jobs this year, Deutsche Bank analysts estimated on Tuesday.

Orcel will likely tell parliamentarians the restructuring not only cut costs but also simplified the business and made it less risky, cutting the threat of new scandals.

Lofts, who sits alongside Orcel on UBS's 11-strong top management team, is a 29-year veteran at the bank and was re-installed as chief risk officer late in 2011 after UBS's rogue trading scandal, following a year as U.S. boss.

Williams, at UBS for 19 years, has been responsible for compliance issues since 2009.

The PCBS, a cross-party panel of parliamentarians headed by Conservative MP Andrew Tyrie, is switching its focus to standards and culture after spending most of the past three months assessing structural reform.

Tyrie said at the time of UBS's fine that Libor rigging was "the clearest illustration yet that a great deal more needs to be done to restore standards in banking".

Former UBS CEO Marcel Rohner will appear before the parliamentarians on Thursday, flanked by Huw Jenkins, Jerker Johansson and Alex Wilmot-Sitwell, three former heads or co-heads of UBS's investment banking division.

(Reporting by Steve Slater in London and Katharina Bart in Zurich; Editing by Dan Lalor)

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Comments (1)
EssexInvestor wrote:
The Westminster Parliament is not doing these committee hearings well enough. The MPs are too interested in drama and wild criticism of “the bankers” (or whoever is their hate group of the moment). They should be asking much more probing and relevant questions about the past and about the present.

The MPs we have are doing as well as their university degrees in media studies and a couple of years as PR assistants has prepared them for. If the political parties chose numpties and the public elect them, these parliamentary committees will continue to be dysfunctional

(Apologies to the small number of competent MPs).

Jan 09, 2013 7:58am GMT  --  Report as abuse
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