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Bankers In The News Again

#2
Also being discussed here

http://news.efinancialcareers.co.uk/formhandler.cfm#addYourComment

A good summary from the Telegraph

travelexec
just now deathvader : to suggest that UBS's losses are someone else's gain shows a lack of understanding of how the markets work, and of what has transpired here. If one trader loses $2bn, that does not mean that another trader makes a corresponding $2bn gain.

A trader losing money does not mean there has been a theft, or even that the people on the other side of the losing trades have necessarily made money.

Let's say the guy at UBS buys a share at 100. The guy at XBank who sells it to him at 100 may have bought it at 111, and so is making a 10% loss.
Then the guy at UBS watches the market go down, and decides to cut his losses and run, selling it for 90 to the guy at ZBank - again, a 10% loss.

Nobody is stiffing anybody here. This is not a zero sum game in the way you are suggesting. It does not automatically follow that there is a massive conspiracy, and that another person has made lots of money out of the situation.

What would appear to be clear is that :
1) The UBS trader has made a massive error of judgement in the positions [for which read "bets"] that he/she has taken.
2) UBS does not have sufficient controls in place to stop this sort of thing happening
3) Regulation is not doing its job, either because the rules are not in place, or they are not being enforced sufficiently.


The regulators need a bollocking as well - why did they not look at this bank closely enough?


From what I hear, UBS is not a happy place to be at the moment
 
#6
City rogue trader arrested over $2bn UBS loss - Telegraph


Mr Adoboli worked in the bank's exchange traded funds (ETFs) business and was arrested early this morning.

In a statement the police, who declined to confirm the trader's identity, said: "A 31-year old man was arrested at 3.30am in central London on suspicion of fraud by abuse of position. He remains in custody."

Records from the City regulator suggest Mr Adoboli joined UBS as a trainee in March 2006. The bank is one of the City's major institutions, with 6,000 staff in the UK and 65,000 worldwide.

Mr Adoboli was hired by UBS after studying at the University of Nottingham, where he worked as communications officer from 2000 to 2001


This is an unexpected background for a trader - does make me wonder if there was any hint of E & D targets when this bloke was hired ....... obviously no red faces in HR at UBS today then.
 
#7
This is an unexpected background for a trader - does make me wonder if there was any hint of E & D targets when this bloke was hired ....... obviously no red faces in HR at UBS today then.
Depends what he studied at Nottingham. A few years ago they were actively recruiting air traffic controllers as traders because they could make quick decisions based on information presented on a computer screen.

My Mrs used to do the diversity reporting for her bank and whilst they are hot on you taking in local talent Nigerians don't really come under that umbrella - there is more than enough ethnic representation in the square mile to keep the liberal ethnic diversity police happy anyway. The Mrs had a rule for her HR recruiters, "never hire anyone coming from a country ending in IA", you avoid soooooo many problems that way.
 

Travelgall

MIA
Kit Reviewer
#8
Depends what he studied at Nottingham. A few years ago they were actively recruiting air traffic controllers as traders because they could make quick decisions based on information presented on a computer screen.

My Mrs used to do the diversity reporting for her bank and whilst they are hot on you taking in local talent Nigerians don't really come under that umbrella - there is more than enough ethnic representation in the square mile to keep the liberal ethnic diversity police happy anyway. The Mrs had a rule for her HR recruiters, "never hire anyone coming from a country ending in IA", you avoid soooooo many problems that way.
Bit harsh on Austria. They should be fine as long as you check their basement thoroughly.
 
#9
Originally Posted by Effendi
Depends what he studied at Nottingham. A few years ago they were actively recruiting air traffic controllers as traders because they could make quick decisions based on information presented on a computer screen.

My Mrs used to do the diversity reporting for her bank and whilst they are hot on you taking in local talent Nigerians don't really come under that umbrella - there is more than enough ethnic representation in the square mile to keep the liberal ethnic diversity police happy anyway. The Mrs had a rule for her HR recruiters, "never hire anyone coming from a country ending in IA", you avoid soooooo many problems that way.
Bit harsh on Austria. They should be fine as long as you check their basement thoroughly.
...and the Aussies :) (not sure about their basements though - probably filled with the "amber nectar" ^_~ in which case
...)
 
#10
It didn't happen.

Never.

It's impossible.

The banks need to be freed from burdensome regulation.

The market is capable of regulating itself.

Industry experts make the best regulators.

Pass the cheese, Mr Harrington. I want to inflate my trousers.
 
#11
Bit harsh on Austria. They should be fine as long as you check their basement thoroughly.
I dunno, bunch of funny continentals.........what with wearing leather shorts and slapping each others bottoms. I have nothing against a bit of female botty spanking, but draw the line at watching grown men [with beards normally] spanking each others leather clad buttocks whilst prancing around an alpine village to the sound of accordian music.
 
#12
Ahh here is the problem.

"Dear Mr Kweku Adoboli

in the utmost secrecy and as an official in capacity of representative of the People Bank of Somalia (Lagos branch) I write with business proposition of great fortune your own esteemed employer and so yourself.

most recently one of our esteemed Nicaraguan clients has died of a natural passing from gunshot wounds and my bank has now custody of his immense fortune of involvement with Swiss Exchange Traded Funds arising from the great success of his business exporting most popular lifestyle products to America, now held in prosperity within my bank, In order for me to unlock this wealth for his heirs all I must require is a single payment of just 2.ooo.000.000 dollars American by bank transfer to a private bank account, this will enable the unlocking of the wealth and in return for any such payment will be triple so making your bank 6,000.ooo.ooo dollar American richer which I most honestly promise you is guarnteed without question and will forever win you the respect and favor of your board of directors.


All that is needed now is the immediate transfer of your employers $Us 20,00.000.000 funds to account number 666666 held at the United bank of Pakistan, Cairo branch Mr. Kweku Adoboli, Please send with no further delay,



With best and most propitious Regards,




Dr. Hubert Ndonga-Smythe

Chief Accountant

People Bank of Somalia



C/O Post Box 500

Mexico city."
 
#13
An interesting explaination here:-

Losing $2B Without Anyone Knowing About It Is Much Harder Than You Think | Kid Dynamite's World

Take a deep breath and start reading - basically he may have booked a trade the wrong way wrong so it looked good to the risk systems, but the author can't work out how no one picked up the funding shortfalls.

One has to wonder what senior management at UBS really knew about this.

The FSA will roast them alive as UBS have made the FSA look a bit sleepy, so there will be none of the usual treatment of the regulators - 100 page powerpoint presentations, no coffee and a warm conference room.

Oh to be a "fly on the wall" for that meeting
 
#14
..................The Mrs had a rule for her HR recruiters, "never hire anyone coming from a country ending in IA", you avoid soooooo many problems that way.
I mentioned this to the Mrs last night, as she nowadays keeps up with US financial news and not UK so it had not come to her attention. First words out of her mouth after I said "Nigerian" were................."what were they thinking hiring someone from an IA country".

One has to wonder what senior management at UBS really knew about this.
Probably nothing, because they were too busy lunching and, as its that time of the year at the moment, doing the calculations for their jan/feb bonuses. You've got to remember that last year 3000 suits got a million pound bonus...AND, that does'nt include all of those under a million quid like say, half a million quid or even 200K. The City is all about the bonus, nothing else.

The FSA will roast them alive as UBS have made the FSA look a bit sleepy, so there will be none of the usual treatment of the regulators - 100 page powerpoint presentations, no coffee and a warm conference room.

Oh to be a "fly on the wall" for that meeting
Yeah, but if its accountants from the big accounting firms on secondment they don't tend to be as nasty because they always have an eye open for a potential customer. However, if its a team of career FSA guys who don't give a monkeys about corporate contact building or freebies to Lords or the Oval............then UBS needs to take cover.
 
#15
An interesting explaination here:-

Losing $2B Without Anyone Knowing About It Is Much Harder Than You Think | Kid Dynamite's World

Take a deep breath and start reading - basically he may have booked a trade the wrong way wrong so it looked good to the risk systems, but the author can't work out how no one picked up the funding shortfalls.

One has to wonder what senior management at UBS really knew about this.

The FSA will roast them alive as UBS have made the FSA look a bit sleepy, so there will be none of the usual treatment of the regulators - 100 page powerpoint presentations, no coffee and a warm conference room.

Oh to be a "fly on the wall" for that meeting
Two senior UBS executives resign over alleged rogue trading affair | Business | guardian.co.uk

Looks like the rumours may be true - that the senior traders knew about this and tried to trade back into the money.

Carsten Kengeter, CEO UBS Investment Bank, has today accepted the resignations of Francois Gouws and Yassine Bouhara, co-heads of Global Equities, following the recently announced unauthorized trading incident. Their resignations come as they assume overall responsibility for the effective management of the Equities business
 

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