Banking standards commission chair Andrew Tyrie says ignorance of Libor rigging by UBS board is ‘staggering’
A former top banker at UBS admitted on Thursday he had been paid £10m in a year by the Swiss bank at a hearing with MPs and peers who described the ignorance of the bank’s senior management to Libor rigging as “staggering to the point of incredulity”.
Huw Jenkins, boss of the investment banking arm until 2008, said he had given back half his pay – which would not have needed to have been disclosed as he was not on the board of a stock market listed company – since leaving the bank.
He was one of four former top bankers at UBS to appear before the banking standards commission in the wake of the £940m fine levelled on the Swiss bank for manipulating the key interest rate.
Andrew Tyrie, the conservative MP who chairs the commission, accused them of “gross negligence” and “being out their depth”.
“The level of ignorance of the board of UBS is staggering to the point of incredulity,” Tyrie said.
Marcel Rohner, who was chief executive during 2007 when UBS was fighting for survival, said he was “shocked” when he read about the manipulation of Libor. “I felt embarrassed and ashamed,” Rohner said. Accused of failing to spot the “epic” scandal, Rohner – who oversaw eight profit warnings and three fundraisings in the thick of the financial crisis – said he had done his “best”.
He insisted Libor rigging had not been brought to his attention – even though he had made a presentation in 2007 boasting about the banks “structured Libor” business.
Jerker Johansson, who ran the investment banking arm from 2008 to 2009, conceded that the activities which took place at UBS to fix Libor rates amounted to “stealing” and eventually agreed it amounted to neglience.
He was accused of being in “blissful ignorance” after admitting he made a “mistake” in failing to realise Libor was a potentially risky area.
Along with former investment banking head Alex Wilmott-Sitwell, all four bankers said they had learned about Libor after they had left and not been interviewed by regulators.
Rohner said he admitted “accountability” for the manipulation of Libor, even though he had not known about it at the time when he was focusing on ensuring the bank did not collapse during the 2007 and 2008 crisis. He described decision-making at the bank as a “complete nightmare” and a “squaring of a circle”.
Asked by Justin Welby, who is to become the next Archbishop of Canterbury, what he would have done differently, Rohner gave a lengthy answer, which included a remark that hiring teams of “mercenaries” was not a way to build a culture in the bank.