UBS has remained oddly silent since its brief press release announcing a $2 billion loss from unauthorized trades in London. The announcement chopped some $5 billion from the bank’s market cap, and neither CEO Oswald Grübel nor any other senior executive has addressed the matter.
It’s instructive to compare UBS’s public response to that of other banks involved in similar situations.
When Jérôme Kerviel’s trades racked up losses of $7.2 billion for Société Générale, its CEO, Daniel Bouton, faced the cameras and the critics head-on. He appeared at a press conference to announce the loss, and issued a detailed letter explaining the trades and how they ultimately were discovered. Bouton, whose offer to resign was rejected by the board, voluntarily suspended his salary for six months.
Similarly, after Allied Irish Bank found itself relieved of $750 million as a result of John Rusnak’s currency trades, it’s CEO, Michael Buckley, issued a statement and held a conference call for investors and media.
The silence from UBS could mean that the bank doesn’t yet know how the losses occurred and how they were concealed for so long. If true, it spells trouble for the bank’s executives and means the crisis is far from over.
Yesterday, I recommended three steps for UBS to begin to put the crisis behind it.