Bad day to be chief risk officer at UBS

Blessed are the risk managers: for they shall be called sons of God.

                                                                                          –  Riskczar 5:9

One can only imagine the profanity and f-words that spewed from the mouth of Maureen Miskovic, the new Chief Risk Officer at UBS, when she learned about the $2 billion rogue trading hit at UBS. I bet she made Carol Bartz look like a Ned Flanders.

It’s still too soon to know who knew what and when, but as Simon Morris explained in a Reuters article, the root cause is likely insufficient supervision:

“No rogue trader works in a vacuum, and UBS’s management must have taken its eye off the ball to allow a trader to operate on this scale without sufficient supervision and without the systems to monitor his trades”

I am sympathetic to risk managers who often make convenient scapegoats when there are likely a half-dozen people including the rogue trader’s boss, boss’s boss and boss’s boss’s boss who are more accountable than the Chief Risk Officer.

There is rarely any upside in being the head of risk management but lots of downside. I will follow Ms. Miskovic’s story with great interest.

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