Switzerland’s UBS has yet to purge itself fully of the culture of arrogance that put it at the centre of a global interest rate scandal, its investment banking chief said on Wednesday.
Reuters reported that the once-venerable Swiss bank was fined a record $1.5bn last month for manipulating Libor interest rates, the latest in a string of scandals including a $2.3bn rogue-trading loss and a damaging tax avoidance row with the United States.
“We all got probably too arrogant, too self-convinced that things were correct the way they were – I think the industry has to change,” Andrea Orcel told Britain’s Parliamentary Commission on Banking Standards, set up after the Libor affair.
“I am convinced that we have made a lot of progress. I am also convinced that we still need to do more.”
British bank Barclays paid a fine of $453m for its role in the interest rate manipulation and more banks are expected to make settlements this year.
Orcel said that UBS had fired 18 of the 40 or so people deemed by Britain’s Financial Services Authority to have been involved in the Libor rigging from 2006 to 2009. Libor, the London interbank offered rate, is used as a benchmark for pricing trillions of dollars of loans.
Most of the remaining UBS staff members implicated in the scandal, including Tom Hayes, a trader charged by US prosecutors with conspiracy, wire fraud and antitrust violation, had already left the bank, Orcel said.
UBS’s Global Head of Compliance, Andrew Williams, told the committee that US bank Citigroup had headhunted Hayes from UBS before the Libor scandal broke, prompting laughter in the committee room.
“What kind of reference did you give him?” Nigel Lawson, Britain’s former finance minister, asked Williams.
