London - Arabstoday
Less than two months after UBS AG chief executive officer Oswald Gruebel said the bank had ‘one of the best\' risk-management units in the industry, his firm posted a $2 billion (Dh7.3 billion) loss from alleged ‘unauthorised trading.\' The disclosure exposed flaws in the bank\'s risk controls that may prompt regulators to restrain lenders from making bets with their own capital, academics and analysts said. Britain\'s Financial Services Authority and its Swiss counterpart said on Friday they would also investigate the UBS trading losses. \"Clearly, UBS\'s risk-management systems aren\'t fit for the purpose, or this couldn\'t have happened,\" said Giorgio Questa, a finance professor at Cass Business School in London and a former banker. \"It shouldn\'t be possible to build up losses this big. Regulators are likely to force them to get out of this field of trading.\" The Swiss lender said the loss at its investment bank was caused by a trader it didn\'t identify. Police in London yesterday charged Kweku Adoboli, a 31-year-old UBS employee, on suspicion of fraud by abuse of position. He worked on the Delta One desk, a team that handles trades for clients and took risks with the bank\'s own money in arranging trades.