By any measure the exiting CEO of UBS Mr. Oswald Grübel was a competent chief. His bad luck was the rot at UBS was beyond him.
The man in his own words as reported in the WSJ,
"That it was possible for one of our traders in London to inflict a multibillion loss on our bank through unauthorized trading shocked me," Mr. Grübel said in a memo to staff Saturday. "This incident has world-wide repercussions, including political ones.... I am convinced that it is in the best interest of UBS to approach the future with a new leader at the top."
My worry about the investment banks is the systems and culture in place across the industry. Of course, on hindsight it is easy to understand the mistake and it always appeared to be easy to fix with an appearance of gross irresponsibility for not having done so.
The guy who should have taken the fall is the head of investment banking. The UBS board should fire him soon.
Every investment bank is a time bomb. The rest were just luckier that their bombs didn't explode. We shouldn't be surprised that there will be more huge trading losses uncovered in the days ahead. This is truly terrible for confidence.
We have an industry wide problem. What happened at UBS was a warning shot. Traders probably know these all along but now word is starting to get out to the rest of us.
Related post: The UBS cowboys