When is a banker 'responsible'?

Fabulous incompetence. Amazing vulnerability. Sensational failure of supervisory systems. All have been on display amid the whirlwind crisis that has beset the Swiss Bank UBS since it discovered evidence of some rogue activity in its woodshed.

Those of us old enough to remember 1995 and the collapsed of the hallowed family bank, Barings, have seen it all before.

Even fresher in the mind is the exact original tactic as the UBS sting perpetrated at Frances’s Societe General by Jerome Kerviel. That one netted some $3bn.

It seems UBS started investigating the key “suspect” in July but failed immediately to spot fictitious positions that had been built to offset genuine losses.

And will we learn?  Apparently not – the Financial Times repeats a quote from a Swiss newspaper interview with UBS’s boss Oswald Grubel. “If you ask me if I feel responsible, then I say no”.

He was heard to moderate his position by last night in a TV interview. Someone will almost certainly go to prison for this. But it won’t be Mr Grubel, and it almost certainly will not be the cascade of supervisory, and management operatives above the individual so far arrested.

Has anything been learned from the 2008 banking disaster – beyond the reality that it is the bulk of middle-income earners and the poor who pay for the consequences? If UBS survives, don’t bank on no bonuses being paid. Maybe I should have stopped that sentence at “don’t bank…” Because these days your money may be safer and slightly more valuable under the mattress…sorry some of you, futon!

Will yet more evidence of  rot in the banking woodshed provoke a popular clamour for introduction of the Vickers Banking Reforms eight years earlier than the 2020 date so far mentioned? Don’t bank on it.

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