“If you see a Swiss banker jumping out of a window, follow him. There is sure to be a profit in it,” Voltaire is once said to have remarked. These days, no action by a Swiss banker should be taken on trust.
The Sfr1.4bn penalty levied on UBS for its organised rigging of official Libor interest rates would come as a shock at many banks. But UBS has brought a special quality of poor management – and worse – to investment banking for the past two decades. This is just another episode in a saga of ambition, incompetence and malfeasance.
The fact that UBS stands for nothing – it was reduced to a set of initials in the 1998 merger of Swiss Bank Corporation and Union Bank of Switzerland – strikes me as symbolic. Its investment bank, which caused most of its troubles, was built from a patchwork of banks – SG Warburg, Paine Webber, Dillon Read – and has always lacked a heart.