Swiss Bank loses two billion dollars

On September 13th it was discoevered that an employee of the swiss bank UBS had fradualently invested away nearly 2 billion dollars of the banks money. The bank claims that customers will not be affected by the incident but the company in itself has dropped nearly 7% in the global market and a third quarter net loss has been projected. There are not only financial reprocussions but a severe blow has been dealt to the companies public image. UBS had barely slipped away from bankrupcy in 2009 due to the global economic crisis.The new turmoil has forced the company to terminate the positions of more than 3,056 employess nearly one fifth of its total staff. This crisis reminds the international community of a similar case in which Jerome Kerviel lost more than 5 billion euros in unauthorized investments causing the collapse of a distinguished french bank. The main question I pose is, why are these banks giving their investors such freedom in the investment field and why is there no oversight? As we have seen in the past, for example the stock market crash of the 1920´s, large investments with little oversight and ever decreasing legal protocol in the international banking system always lead to catostrophic failures in the banking industry. Such failures could make an already painful lul in the economy even more unbearable.Not only can cases like this be damaging to the economies of europe but also to the overseas establishments which have invested in said companies.Both cases seem to point out a huge flaw in the European banking system and yet both have been swept under the rug like an embarassing picture. It seems that the bank UBS has learned nothing from its mistakes . In fact, the bank has claimed no responsiblity for the matter puts all the blame on the rogue investor, UBS even fails to accept responsibility for the economic damages done by the rogue investor claiming "no customer funds were harmed" but this is wishful thinking at best. Customers pensions, savings, and CDI's are bound to affected due to the 7% drop in UBS, not only from this but from the already miniscule profit line projected in the third quarter.In closing, Banks need to watch their investors more feverishly and constantly check the books because the results of not doing so could be cripiling to the economy.

Sources:
1.http://www.ksta.de/html/artikel/1315910863587.shtml

2.http://www.rtl.fr/actualites/economie/article/ubs-perd-2-milliards-de-dollars-un-tra

3. Colbert Report