UBS shows $10 billion subprime writedown
Written by Timothy Blake on December 12, 2007 under Archives, Economic Impact, International, Investors, Root Causes
Tags: Archives, bank, banks, Capital, Economic Impact, International, investor, Investors, mortgage, Root Causes, subprime
This time it’s an investment bank with problems. Swiss-based UBS announced a $10 billion writedown this week on subprime exposures. An injection of capital from investors in Singapore and the Middle East was also announced. UBS has also slammed on the brakes at its investment bank, where the problems originated. UBS has been the biggest casualty so far among major European banks of the meltdown in U.S. subprime mortgages. Some analysts continue to characterize subprime as loans made to people with poor credit histories. Others say lack of regualtory action and oversight transformed predatory lending into acceptable lending standards.
A recent article by Andrew Hurst has more details about problems at UBS.
[...] Today’s surge (14% or so for UBS) shows investor confidence in financial firms, regardless of how hard they’ve been hit by the recession (I do believe that’s what we’re calling these wonderful times now, no?) or the mortgage industry debacle. While UBS has been writing-off happy, it’s also been getting rid of its excess C-Level execs and senior-level management in the wake of it all. UBS has given walking papers or had senior people take off, including Chairman Marcel Ospel, as well as UBS’ CEO, CFO, and investment banking chief. [...]