UBS 'didn't recognize risks'
UBS AG, Switzerland's biggest bank, said senior management of its investment bank only recognized the severity of its subprime problem in late July.
"It appears that the investment bank management did at no stage conduct a robust independent assessment of its overall subprime exposures," the Zurich-based company said in a report on its website yesterday. "Consequently, group senior management relied on assurances of others rather than obtaining all of the facts and analytically reviewing the situation."
The report is a summary of the review submitted to Switzerland's federal banking commission EBK, which is looking at the causes of the bank's subprime holdings and resulting writedowns. UBS' losses from mortgage-related holdings have swelled to about $38 billion over the past three quarters.
The Dillon Read Capital Management LLC hedge fund that was shut down in May 2007 following losses from mortgage-related securities accounted for about 16 percent of the bank's subprime markdowns last year, UBS said.
Agencies
(China Daily 04/22/2008 page17)
