Police in London have arrested a 31-year-old man after the Swiss bank UBS announced they had lost 1.5 billion euros through unauthorised dealing.
He has been named as Kweku Adoboli, who is described in an internet profile as a director of exchange traded funds in its London office.
The bank’s website announced the loss just before trading opened, and its shares plummeted eight per cent.
Markets analyst James Hughes said: “This is mainly a confidence issue now of course. Back in 2008 all of these banks across the world, people lost confidence in them, the governments had to bail them out. Now, when we’re just starting to think that maybe some of these banks are getting a foothold back, maybe regaining that confidence, which they’ve had to work very hard to get back, something like this happens.”
The term ‘rogue trader’ was coined by Nick Leeson whose disastrous losses from unauthorised speculation in derivatives destroyed Britain’s oldest investment bank, Barings. He went to jail for four years.
France had its own rogue trader too, in the form of Jerome Kerviel. His dodgy dealings cost Societe Generale 4.9 billion euros in 2008, and earned him a five year jail term.