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October 15, 2010updated 04 Apr 2017 3:52pm

UBS failed to assess cross-border US wealth compliance dangers

A UBS review has found the Swiss bank failed to appropriately assess the compliance risk of its US cross-border wealth management business before its investigation by US authorities. The 76-page transparency report, prompted by the recommendations of a Swiss parliamentary committee, sheds light on the events that led to the bank to make writedowns of more than CHF50bn ($52.4bn) from the third quarter of 2007 to the fourth quarter of 2009.

By Brooke Balza

A UBS review has found the Swiss bank failed to appropriately assess the compliance risk of its US cross-border wealth management business before its investigation by US authorities.

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Analyze opportunies within the wealth management market in APAC

GlobalData’s ‘Asia-Pacific Wealth Management: Market Sizing and Opportunities to 2026’ report provides a comprehensive overview of the Asia-Pacific (APAC) wealth management market.
  • The report analyzes the APAC wealth and retail savings and investments markets. This includes affluent market size, both by number of individuals and the value of their liquid assets.
  • The affluent population grew by 5.3% in 2021 and is expected to grow at an AAGR of 4.8% between 2022 and 2026.
  • The value of liquid assets held by the affluent segment surged by 8.4% in 2021, backed by economic recovery. HNW individuals’ financial wealth grew by 12%, while mass affluent individuals’ wealth grew by 6.0%.
  • The report provides an analysis of factors driving liquid asset growth. It is also split into asset classes - equities, mutual funds, deposits, and bonds.
  • The affluent population are more risk-tolerant and invest a significant proportion of their investments in risky assets such as equities, compared to emerging affluent and mass market individuals.
The report also provides data and insights on the size of offshore holding of HNW investors in the APAC region.
by GlobalData
Enter your details here to receive your free Report.

The 76-page transparency report, prompted by the recommendations of a Swiss parliamentary committee, sheds light on the events that led to the bank to make writedowns of more than CHF50bn ($52.4bn) from the third quarter of 2007 to the fourth quarter of 2009.

In the report, UBS drew attention to the problems in the wealth management business where it was alleged UBS staff helped American customers to set up offshore structures, and in some cases accepted false declarations in US forms to help customers evade tax. 

 

Ongoing wrangles with US regulators

The problems led to a series of ongoing wrangles with the US Department of Justice and Securities and Exchange Commission over the names of 4,450 US client accounts UBS holds in Switzerland.

In some cases, internal rules and expectations were not communicated clearly enough and compliance failures were not promptly detected and corrected, the report said.   

UBS has published the review into how it nearly collapsed under the weight ofbns of toxic securities in 2008 in an attempt to draw a line under its chequered past.

This is the largest loss incurred by any bank in Europe and the third-largest in the world.

 

No legal action against top managers

But the bank confirmed it would not take any legal action against UBS’s former top managers, because this would “lead to negative international publicity and hamper UBS’ efforts to restore its good name in the markets it operates”.

Switzerland’s largest bank acknowledged that the bank’s growth into investment banking was not planned in a sufficiently systematic manner.

Also, it found incentives to generate revenues were not weighed appropriately against risks, and that this happened across business units, multiplying the bank’s exposure.

 

Free Report
img

Analyze opportunies within the wealth management market in APAC

GlobalData’s ‘Asia-Pacific Wealth Management: Market Sizing and Opportunities to 2026’ report provides a comprehensive overview of the Asia-Pacific (APAC) wealth management market.
  • The report analyzes the APAC wealth and retail savings and investments markets. This includes affluent market size, both by number of individuals and the value of their liquid assets.
  • The affluent population grew by 5.3% in 2021 and is expected to grow at an AAGR of 4.8% between 2022 and 2026.
  • The value of liquid assets held by the affluent segment surged by 8.4% in 2021, backed by economic recovery. HNW individuals’ financial wealth grew by 12%, while mass affluent individuals’ wealth grew by 6.0%.
  • The report provides an analysis of factors driving liquid asset growth. It is also split into asset classes - equities, mutual funds, deposits, and bonds.
  • The affluent population are more risk-tolerant and invest a significant proportion of their investments in risky assets such as equities, compared to emerging affluent and mass market individuals.
The report also provides data and insights on the size of offshore holding of HNW investors in the APAC region.
by GlobalData
Enter your details here to receive your free Report.

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