Ex UBS boss blames "mercenaries" for Libor debacle

Thu Jan 10, 2013 9:55am EST
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By Steve Slater and Katharina Bart

LONDON/ZURICH (Reuters) - The former chief executive of UBS UBSN.VX blamed "mercenaries" for its role in the global interest-rate rigging scandal that has further undermined the Swiss bank's once venerable reputation.

UBS was fined a record $1.5 billion last month for manipulating Libor interest rates, the latest in a string of debacles - including a $2.3 billion rogue-trading loss and a tax avoidance row with the United States - that have rocked Switzerland's largest lender.

"In these pockets where we had these problems it wasn't probably a bad culture, but it was a lack of culture," Marcel Rohner told a British parliamentary panel investigating banking standards in the wake of the Libor scandal.

"When you grow a business too quickly you hire people from many different places and some of them ... you really have to qualify as mercenaries," he told the panel on Thursday.

Panel members accused Rohner and three other former UBS executives of gross negligence and incompetence for failing to detect the manipulation, which stretched back to 2005 and occurred when each of them had been in charge of the bank's investment business.

"The level of ignorance seems staggering to the point of incredulity," said Andrew Tyrie, who heads up the Parliamentary Commission on Banking Standards (PCBS). "Not only were you ignorant of what was going on, but you were out of your depth."

All four executives said the first they had heard of UBS's involvement in rigging Libor was from press reports in 2011.

Investigations by British, Swiss and U.S. regulators revealed rate manipulation on what the U.S. authorities called an "epic" scale.   Continued...

Swiss bank UBS former Chief Executive Officer Marcel Rohner looks down as he addresses the audience during the results news conference of the bank in Zurich February 10, 2009. REUTERS/Christian Hartmann