Offshoring completed, bonuses paid, management moved on.
Ah, the joys of cost-saving!
The perils of outsourcing have again come under the spotlight after regulators investigating the $US2.3bn loss at Swiss bank UBS pointed to key risk management failings at a third party provider based in India. The FSA and Swiss regulator FINMA launched a joint investigation into UBS in September 2011 after it came to light …
Which are supposed to increase shareholder value, but when you couple the losses AND the fine, it comes out of the shareholders pockets. ManagementManglement strikes again!!!!
In any case, this amounts to a slap on the wrist. If you want any real teeth in financial reform, there must be consequences for shenanigans.
Start with a lifetime ban on holding a board level or senior executive position in any publicly traded company. IOW you become "damaged goods" and no one would want to hire you. Take that expensive education, and resort to cleaning the shit out of horse stalls, or something similar. I know, have them clean up the bullshit that accumulates at cattle feed lots. Manglement is good at spouting bullshit, so they ought to know it when they see it.
Are they f**king kidding? Traders take *chances* if they take enough bad ones the whole companies down the toilet. The companies survival (and their jobs) *should* depend on (at least in part) on managers keeping a good eye on the risk level. So either.
a) They trusted their traders *implicitly* to not take chances (see first line) b) Someone had suspicions and wanted to show clean hands if they were right.
As a publicly quoted company UBS shareholders should discipline them by dumping them.
Speaks of poor security and peer reviewing of processes. I doubt if anyone in UBS/London can write a specification for this, let alone having capability to ascertain risks.
And London is where most of these poor decisions have originated leading to not just this but also the fall of 2008.
No wonder 4 banks I know are moving out of England. Deutsche Bank is one of them and making their operations in Chennai and Frankfurt larger!
Q. What do Nick Leeson, Jérôme Kerviel and Kweku Adoboli have in common (apart from costing their employers billions of dollars)?
A. They all started in back office positions and then moved to trading desks.
This should be a huge red flag, warning that a close eye needs to be kept on their activities. They know how the management systems work and their weaknesses, and (frighteningly often) the privileges necessary to do their old job are not completely revoked.
I tell my clients in financial services that anyone looking to move from the back office into trading should be encouraged, but encouraged to change employers as well. It's harsh on people who might make excellent traders, but at least somewhere else they won't have the keys to the kingdom in their back pocket.
Yes, ST Chart moved their IT out there years ago, London had to beg for a 20 minute admin window just to add a new or rebuilt PC on the UK network, and of course the Chennai guys all had such perfect english and could spell all our names.
Now they are paying for their stupidity, but Mervin still got his bonuses
@AC 09:16 Are the operations in Chennai run by the cowboys that go by the name of HCL per chance ?
I know from first hand experience that Deutsche banks Chennai It operations are incredibly inept and regularlly kill system by botching firmware upgrades and also destroying disks by not properly breaking mirror sets during patching operations . There levels of spoken english is shocking and they dont follow procedures as the workers are changed on a very frequent basis with no communication of the required procedures to the new staff .
"The FSA and Swiss regulator FINMA launched a joint investigation into UBS in September 2011 after it came to light that rogue trader Kweku Adoboli had incurred huge losses because he was allowed to make unauthorised trades from the London office of the bank.
This is arse-covering BS, the traders are allowed unfettered trades. When things go well, management takes credit, when things go wrong the trader gets the blame ..
Financial services company had an app to calculate car insurance premiums. App has a bug which allowed much lower premiums (Old data not properly flushed). Senior management knew about it for 3 years and in some cases showed new staff how to take advantage of it. When forced to act they partly fired people rather than a) Firing everyone or b) Getting them altogether and telling them this stuff is off limits and you can't game the system any more (and fixing the bug might have been a good idea as well).
I know some of the people fighting an unfair dismissal case around this but I'm not directly involved.
AC for obvious reasons.