UBS admits failings as shareholders gather for meeting

21 April 2008

Beleaguered banking giant UBS has admitted serious strategic and risk management failings, leading to the huge losses it sustained in the credit crunch.

Reckless buying of asset-backed securities linked to the now-collapsed US sub-prime loans market by the bank has led to total write-downs of $37 billion.

Chief executive Marcel Ospel has also ignominiously left his post due to the crisis - and there have also been calls for the bank to be broken up.

The admissions come in a 50-page report sent out to shareholders who are gathering in Switzerland for the bank's annual general meeting this week.

Meanwhile, shareholder and former UBS chief executive Luqman Arnold gave a downbeat overview of the firm's future prospects to Swiss daily NZZ.

"I still cannot see any light at the end of the tunnel for UBS," he claimed.

Mr Arnold also criticised the bank's current chief executive, Peter Kurer - who replaced Mr Ospel earlier this year.

"After the immense damage perpetrated in UBS, any board worldwide would have looked for the best man," he added.

"For us, Peter Kurer lacks independence and experience. He is not the best candidate for this difficult job."

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