ZURICH Dec 19 Unlike the outrage that hit
Barclays after the British bank was fined for rigging a
benchmark interest rate, reaction in Switzerland to UBS's
1.4 billion franc ($1.53 billion) penalty for the same
offence has been muted.
There appears to be little appetite to attack UBS, whose
reputation has already been tarnished by a series of damaging
The Swiss government and Swiss National Bank both said they
had taken note of the penalty, but didn't comment further on
Even Christian Levrat, president of the left-wing Social
Democrats (SP) which is typically critical of banks, stopped
short of calling for any specific changes at the bank.
He said he wanted UBS to be more transparent and cooperative
in unearthing past scandals. "This game of cat-and-mouse must
stop," he told Reuters.
The seeming nonchalance over UBS is a sharp contrast with
the crisis that engulfed Barclays, which got a much
smaller fine of $450 million in June.
Barclays had hoped that it would get some credit by going
first in what is expected to be a series of banks making
settlements related to manipulating the Libor rate. Instead, the
fine triggered a storm of angry newspaper headlines and outrage
in parliament and among the British public.
Barclays' chief executive Bob Diamond was forced out of his
job less than a week later and Chairman Marcus Agius has also
Lawmakers grilled top officials at the Bank of England and
Financial Services Authority and accused them of failing to
respond properly to U.S. concerns about possible Libor rigging.
The contrasting fates of the two banks may suggest a "wait
and see" policy makes more sense, according to insiders at
Deutsche Bank, which is facing months of
investigation for its part in the global Libor scandal.
"The one who moved first here has lost," said a source at
Deutsche Bank, which was not involved in settlement
Paul Dembinski, a Swiss university professor who heads the
Observatoire de la Finance, a think tank that studies the ethics
of finance, said UBS had seen the risk and managed it well.
"This settlement is a way of not opening all the books and
not showing everything. It's a way of managing risks," he said.
"From a bank perspective it's a very reasonable amount."
About 40 employees have left UBS over the scandal, a
fraction of the 10,000 job losses planned as the bank withdraws
from fixed-income business.
"People were in the process of adjusting to the 10,000 cuts
and starting to get more comfortable looking ahead to where we
want to be in 2015, so this (fine) is a distraction," a senior
UBS employee told Reuters.
"That notwithstanding, there is a general feeling we're
doing the right things and moving in the right direction," the
Despite the size of UBS's fine, it remains unclear if the
scandal will cost UBS more than the money it made from Libor
In a memo to staff, Chief Executive Sergio Ermotti said the
bank was unable to assess the impact on its clients.
"The regulatory investigations continue, and we are far from
having an understanding of the effect of the actions of multiple
institutions on the actual rate fixings, which one would need to
know before trying to determine whether or how clients were
affected," he said.
UBS did not mention the damage to savers and borrowers in
its public statement.