Das Ring der UBS cycle is complete…

As with most great Risk accidents – this one has gone full cycle.
Starting with a Market Risk oversight failure (the Front Office) by the delta one desk, the trades sailed right by Market Risk Control (hey -our VaR calculations were accurate, its just that the position was wrong) and most likely abetted by a Credit Risk issue, who’s system was either bypassed or used fraudulently to cover or hide the margin calls (hey these were ‘riskless trades”) and finally whiffed on by Operational Risk Control, which allowed the fictional trades to be booked & never properly verified. The net result was a financial hit, although large, was not as bad as the damage done to its Reputation. While the final details are not yet know, its already cost the company its CEO and aftershocks to its Investment Bank which it may or may not survive.


About bohicaman

Former Trader, Risk Manager, CRO, COO, etc. Global experience in all forms of listed and OTC derivative markets Citizen of the world Resident of the USA Favorite color is blue
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s