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

USB Banks Take $2 Million Hit, a Detrimental Impact - Essay ExampleSince the Swiss and European banks operate in a antithetical way, this new scenario poses new challenges for implementing controls. The economy in the past years has been weak to say the least. Banks confine 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 bash by a fraud, it has a dynamic impact throughout the banks in the international front. integrity 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 Street daybook 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 honorable $2 billion in losses. The crisis slammed shares of UBS, which on Thursday fell n early 11% in Swiss trading and 10% in New York shoot Exchange trading. The British Police breaked a man for committing fraud and playing with equities. The news that UBS lost $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 cognise as Kweku Adoboli, a London-based trader who worked in the exchange desk. The British police confirmed that they arrested an individual who was committing fraud but have not charged him yet. gibe to officials, Mr. Adoboli was certified to work in the securities business since March 2006. Mr. Adobolis past experience in trading enabled him to conduct this fraud in a real passive manner. The felon was under a different alias in the popular job site called LinkedIn. Authorities are still not sensible whether he still works for that bank. The bank officials made the discovery late when the London pol ice 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 observe 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 undoubtedly raised the problem of the internal management control that were miss 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 lead. Clearly, the banks risk-management system had flaws since it had to write down $50 b illion in securities exchange. Collins Stewart, a key 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 damage as other banks might default in their loans. This