USB Banks Take $2 Million Hit, a Detrimental Impact Essay

USB Banks Take $2 Million Hit, a Detrimental Impact - Essay workoutSince the Swiss and European savings situates operate in a different way, this new scenario poses new challenges for implementing controls. The economy in the past years has been weak to say the least. Banks have been defaulting in loans as creditors have failed to pay their loans. These trickled effects have been a domino effect internationally. When one bank is knockout by a fraud, it has a dynamic impact throughout the banks in the international front. One of the major banks that recently was charged for dealing with unauthorized revenue was UBS. The bank already was mounted with numerous amounts of risks and troubles prior to this massive problem. The Wall path Journal reports that UBS was charged $2 billion for conducting unauthorized trades. The news pretty much shocked the financial market as the UBS AG accumulated a hefty $2 billion in losses. The crisis slammed shares of UBS, which on Thursday fell ne arly 11% in Swiss trading and 10% in immature York Stock Exchange trading. The British Police arrested a humanness for committing fraud and playing with equities. The news that UBS broken $2 million took a big detrimental hit as the losses crippled the European economy. The Europeans have become increasingly uneasy about withdrawing equity from Euro Zone banks. The convicted felon was a man known as Kweku Adoboli, a London-based trader who worked in the exchange desk. The British police affirm that they arrested an respective(prenominal) who was committing fraud but have not charged him yet. According to officials, Mr. Adoboli was certified to work in the securities barter since March 2006. Mr. Adobolis past experience in trading enabled him to conduct this fraud in a very passive manner. The felon was under a different alias in the popular ruminate site called LinkedIn. Authorities are put away not aware whether he still works for that bank. The bank officials made the disc overy late when the London police informed the administration. Around 3.30 at night, the police confirmed their arrest of the felon. However, some parts of the how Mr. Adoboli conducted this scheme seem vague to officials. The officials were also unable to determine the casualties since UBS operates in major countries including United Kingdom. In midst of all these things, UBS discovered the hefty losses that they incurred. The UBS bank is still working hard to assure that all the positions are closed. In addition, the bank took a deep hit as their reported revenue fell from $8.2 billion to a $2.7 billion loss. The new shock doubtless raised the problem of the internal care control that were lacking in the band. Additionally, the unawareness the managers possessed was shocking. The management internal controls lacked the adequate understanding of mitigating the risks as this felon was free to conduct trades at his own impart. Clearly, the banks risk-management system had flaws si nce it had to write down $50 billion in securities exchange. Collins Stewart, a get wind analysis of financial markets depicts the demise of this situation as he states, A loss of this magnitude will very likely have occurred in the fixed-income, currencies and commodities division, the very division UBS has been systematically rebuilding after shrinking it by 40% during the credit crisis. Undoubtedly, this will trouble the foreign markets. In addition, it might hurt the currency exchange as the Euro rate will dip down. It will also cause collateral impairment as other banks might default in their loans. This