The risk and finance team at UBS failed to comprehend the impact that
sub-prime debt would have on the Swiss bank, chairman Marcel Ospel has told
investors in London.
The bank was forced to take a $10bn (£4.8bn) write down on Monday despite
earlier assurances that it had processed all relevant data when valuing
sub-prime derivatives and taking a ‘conservative’ approach to valuations.
Ospel said: ‘The people concerned and their supervisors failed to recognise
properly the size and changing nature of the positions that were being
established at the time. Risk control and finance had the numbers but failed to
realise in time what they truly meant’.
According to the FT, the investors were left unconvinced by Ospel’s
presentation. They said his comments were an admission that UBS had been using
its balance sheet to pump cheap cash in risky securities.
The admission and write down have placed Ospel’s position at the helm of UBS
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