The press has welcomed the resignation of UBS chairman Marcel Ospel, saying the move was overdue. But doubts remain over the future of Switzerland's largest bank.This content was published on April 2, 2008 - 09:51
Editorialists warn that the bank, which was hard hit by the mortgage crisis in the United States, has some way to go to win back the trust of clients across the world.
The respected Neue Zürcher Zeitung newspaper says UBS - which wrote down more than SFr40 billion ($39.4 billion) as result of the credit crunch – needs new faces on its board.
Ospel's resignation is a "half-hearted act", it says, and describes the appointment of Peter Kurer, a top legal advisor at the bank, as a "stopgap solution".
Editorials in the NZZ and the tabloid Blick hint that Ospel's move came amid massive pressure by Switzerland's regulatory bodies and the finance ministry.
For the Tages-Anzeiger, the new name on the board is clearly not enough.
"The UBS board is replacing one name, but it won't help rebuild confidence," it warns.
It adds that Ospel was just a representative of a system, which has taken a serious knock.
"The brand UBS, one of the top addresses worldwide, is destroyed. The consequences for Switzerland as a financial centre are difficult to assess," the paper writes.
The Geneva-based Le Temps says the crisis made Switzerland realise how its banking system depends largely on two leading financial institutions – UBS and Credit Suisse - competing on the international scene.
And it calls for increased supervision: "If you want to race with the fast cars you have to adapt your own vehicle accordingly. The banks will have to pay a high price for that."
The Basler Zeitung looks on the bright side, saying UBS share prices soared after the announcement of Ospel's resignation. It adds that the appointment of a successor was just one step.
"A malignant growth has been removed. But the most effective move was to create a separate unit to deal with risky deals on the mortgage market," it writes.
The story also made the headlines in the English-speaking world.
The Financial Times says Ospel should have quit earlier for an orderly succession: "The chairman's mistake was not to see himself as a liability until it was too late."
"It will take years for UBS to recover from the fix it finds itself in. The new chairman must find new opportunities for business, perhaps by expanding wealth management. It will be quite a task," it cautions.
In a similar vein, The International Herald Tribune headline warns that to move "UBS out of squall won't be easy".
For its part the European edition of the Wall Street Journal gives the downfall of Ospel extensive coverage but also portrays the new UBS chairman on its front page.
The German Handelsblatt notes that Ospel came across as a "stubborn schoolboy who is no longer interested in his exam marks because he's leaving".
While the French paper Libération and Belgium's L'Echo liken the financial situation at UBS with the crisis at the former national airline, Swissair, which folded a few years ago.
"Crisis at UBS prompts panic among Swiss authorities", is the headline on the Libération.
swissinfo, Urs Geiser
Switzerland's largest bank, UBS, is seeking SFr15 billion ($15.1 billion) in new capital after making a net loss of about SFr12 billion in the first quarter of 2008. It follows a writedown of SFr40 billion, and possible further losses.
UBS endured a tough 2007, starting with the collapse of its hedge fund Dillon Read Capital management. In October, the bank said it would cut 1,500 jobs in its investment banking arm, including that of its head Huw Jenkins.
Later that month UBS announced it was writing off SFr4.2 billion on subprime losses and SFr726 million pre-tax loss for the third quarter – the first quarterly loss in nine years.
In December the bank said another $10 billion would be written off as the US subprime crisis deepened. It also announced plans for a SFr13 billion funding plan from Singapore and Middle East investors, which was passed by shareholders in February.
A further $4 billion was written off in January, bringing the total losses to around SFr20 billion. This total was virtually doubled with the announcement of a further $19 billion (SFr19 billion) writedown on April 1 and was rounded off with the departure of the bank's embattled chairman Marcel Ospel.