UBS chairman designate Peter Kurer recently told reporters the bank, which has become the world's hardest hit by the subprime lending crisis, will need at least three years to recover. It would be foolish, he said, to think no damage had been done to the organization's reputation. Reuters summarizes the Swiss bank's woes this way:
UBS, the world's largest wealth manager, has written down around $37 billion in assets and cleaned out most senior management -- including chairman Marcel Ospel -- after asking investors for emergency cash two times in as many months.
Kurer hasn't reached his chairman designate position without opposition, but the story says he is due to take his board seat officially at the company's annual shareholders' meeting on Wednesday, April 23.
In a report to shareholders released Monday, company officials admitted they didn't consider risk management or management supervision in an almost obsessive focus on "maximizing revenue." According to The Independent
UBS's unprecedented 50-page mea culpa was a summary of the findings of an internal investigation demanded by the Swiss Federal Banking Commission, the domestic financial watchdog....
...The report detailed numerous failures in the build-up to the writedowns, which largely hit three of the group's divisions. These were UBS's hedge fund arm, Dillon Read Capital Management, and, in the investment banking grip, the collateralised debt obligation desk and the foreign exchange and cash collateral trading desk.
Fallout from the writedowns included the ouster of the bank's former CEO and CFO, as well as the organization's former head of investment banking.