If you were CEO of UBS, would you resign because of the rogue trader that resulted in $2.3 billion unauthorized loss?
The Swiss banking giant UBS said on Saturday that its chief executive, Oswald J. Grübel, had resigned over a rogue trading scandal that shook the European banking sector and raised new questions about the adequacy of financial regulation.
The resignation was a dramatic fall for Mr. Grübel, who came to be known as “Saint Ossie” for reviving Credit Suisse, another Swiss banking giant, before he was hired out of retirement two and a half years ago to do the same at UBS.
Mr. Grübel decided that the $2.3 billion loss as a result of unauthorized trades by a midlevel employee had made it impossible to run a bank that has lurched from crisis to crisis in recent years and desperately needs to repair its reputation.
“I did not take the step of resigning lightly,” he wrote in an e-mail to staff on Saturday. “I am convinced that it is in the best interests of UBS to approach the future with a new leader.”
He also said the trading scandal had “worldwide repercussions, including political ones.”
The case has added to a global debate about whether there should be more stringent regulations for banks that are so big or interconnected — like UBS — that their problems can spread distress throughout the financial system. In 2008, for instance, UBS required a bailout from Swiss taxpayers after sustaining billions of dollars in losses.
Initially, after a 31-year-old trader in the bank’s London office, Kweku M. Adoboli, was arrested on Sept. 15 and accused of making billions of dollars in unauthorized trades dating to 2008, Mr. Grübel seemed to hold out the possibility of staying at UBS.
Mr. Grübel, 67, will not receive a severance payment and there is a six-month notice period, Mr. Villiger said.
During his tenure, Mr. Grübel managed to return UBS to profit by reversing client money outflows at its private banking business and by reducing costs by cutting thousands of jobs.
He also contended with an investigation by United States authorities that the bank had helped wealthy American clients avoid paying taxes; UBS paid a $781 million fine and agreed to accept probation through a deferred prosecution agreement. In response, Mr. Grübel went on a charm offensive with clients and started a new advertising campaign to help repair the bank’s damaged reputation.
But UBS recently struggled to retain talent, especially investment bankers, who felt that they were underpaid and that management’s focus had shifted toward the more successful wealth management unit, widely considered to be the crown jewel of the company. Mr. Grübel rejected pressure from investors and regulators to sell or spin off the investment banking unit.
