UBS AG: The Cost of Failing to Manage Operational Risk

Author :

Dr Viola Makin and Chijioke Oji

Pages :

13 pages

Product Type :

Case

Reference # :

WBS-2013-3

Teaching Note :

not available

Institute:

Wits Business School, University of the Witwatersrand

Setting:

Britain

Year:

2013

Keywords:

Ethics, Finance, Banking

Summary/Abstract:

On 15 September 2011, news of United Bank of Switzerland’s (UBS) operational failures in its investment banking division hit the market. Kweku Adoboli, a trader who worked at UBS’s central London branch, had beaten the control system and carried out a number of unauthorised trades. The trades cost UBS US$ 2.3 billion in losses – the biggest trading-related loss in the history of banking in Britain, with the impact felt across banks in Europe. Engulfed by calls for closer scrutiny of its entire operational system and trading culture, senior management at UBS fought hard to restore confidence in the bank.