UBS scoundrel loss strike risk efforts

LONDON: A $2 billion rogue trading hit at UBS deals an early blow to its new chief risk officer, previously head of risk at Lehman Brothers, and undermines claims by the Swiss bank and the industry that such events are a thing of the past.

Maureen Miskovic took over as chief risk officer at UBS at the start of the year.

She arrived from US-based financial services group State Street with a strong reputation and has shaken up risk management at the bank, according to one industry source.

So news on Thursday that a single trader had lost UBS around $2 billion in unauthorised deals, and the arrest of 31-year-old Kweku Adoboli in London in connection with the case, stunned the market and sent shares skidding

"It's astonishing given the technology, the systems, the emphasis on risk. UBS has been focusing on it, post-crisis they've put more focus on it than a lot of other banks," the industry source said.

Copyright Reuters, 2011