UBS: Rogue trader or rogue bank?

The recent arrest of Kweku Adoboli marks the latest in a long line of costly blunders by UBS. The unauthorised trades, costing the Swiss bank $2.3bn, is a clear sign that the bank is in urgent need of reform.

Kweku Adoboli, a London-based employee, was arrested last week after the discovery of his unauthorised trades, which are said to have amounted to large, unhedged bets on major stock indices. Adoboli had allegedly pretended to offset his bets with positions in exchange-traded funds (ETFs). Like Socit Gnrale's rogue trader Jerome Kerviel in 2008, Adoboli worked on the Delta One' desk, which deals with securities tracking underlying assets, such as swaps or ETFs.

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