Ospel admits to errors at UBS by Finance News Bulletin

Published: 13/12/07

All era are London time Search News in the FTcom siteSearchSearch Quotes in the FTcom siteQuotes In depthBreadcrumb trail direction-finding:FT Home > In depth > Global praise squeezeServicesMarcel Ospel, chairman of UBS, admitted on Tuesday the Swiss bank’s danger and finance component had failed to understand the subprime mortgage positions that led to its $10bn (€7bn) record, even though it was aware of the huge figures involvedIn his first face-to-face public encounter with shareholders since the subprime disaster broke this summer, Mr Ospel used an investor daylight hours in London to make his strongest assault yet on the bank’s failure to exist up to its reputation for risk management

But investors were unenthusiastic and some privately questioned why Mr Ospel was not holding himself more answerable for the bank’s failuresThe lossmaking positions “were established by a small number of people in service in one team”, Mr Ospel supposed, adding they were “created in the interest of clients but were held in pursuit of proprietary trading”He added: “The populace concerned and their supervisors failed to recognise properly the size and altering nature of the positions that were being established danger control and finance had the numbers but unsuccessful to realise in time what they truly meant

still so, Mr Ospel repeated his intention to continue as chairman Some investors said they felt organization was dismissive and had made insufficient effort to persuade them that the store was worth buyingThe investor day was eclipsed by Monday’s announcement of the write-offs and measures to make stronger UBS’s capital base, including the sale of SFr13bn (€8bn) of adaptable bonds to strategic investors, savagely diluting obtainable shareholders“The message seems to be that they will dilute investors all they similar to,” said one attendee

Another supposed: “Once upon a time, we had a large holding, but they have made it a small one”Zurich’s Tages-Anzeiger, the city’s largest circulation paper, ran a front-page cartoon presentation Mr Ospel sitting with fellow directors but presentation anxiety only about his bonusThe Neue Zürcher Zeitung, usually supportive of UBS, contrasted the board’s constitutional responsibilities for supervision with Mr Ospel’s assertions the board was accountable for strategy not day-to-day operationsBlick, Switzerland’s biggest circulation newspaper, optional that Singapore’s SFr11bn investment in UBS ought to prompt the former amalgamation Bank of Switzerland to rename itself the Union store of Singapore

Copyright The Financial era Limited 2007UBS takes new $10bn subprime hit - Dec-10Editorial remark: Cyclical capital - Dec-10Lex: UBS writedown - Dec-10European sight: UBS chairman Ospel should fire himself - Dec-10World View: Bank terminator has more home cleaning to do - Dec-10UBS unlocks outside capital to soak up losses - Dec-10More in this section* smallest amount delay 15 minutesAll times are London timeFT HomeSite mapContact usHelpAdvertise with the FTMedia centreStudent offersFT ConferencesFT SyndicationCorporate subscriptionsFT GroupPartner sites: Chinese FTcomLes EchosFT DeutschlandExpansionInvestors ChronicleExec-Appointmentscom© patent The Financial era Ltd 2007 "FT" and "Financial era" are trademarks

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