Bank CEO: Stop bashing us
'Life is hard enough,' says the head of UBS, which took a taxpayer bailout, had a rogue-trading scandal and is being investigated for currency manipulation.
"Life is hard enough, and I think this constant lecturing on ethics and on integrity by many stakeholders is probably the most frustrating part of the equation. Because I don't think there are many people who are perfect," Ermotti said in an interview at the World Economic Forum in Davos, Switzerland. "We are far from being perfect. . . but it's not going to be very helpful to be constantly bashing banks."
Ermotti is saying what many bank executives are privately thinking. But at a time banks are held in low regard by many Europeans, few executives are willing to publicly give voice to such frustrations.
UBS has been on the receiving end of quite a lot of bashing, thanks to huge losses it suffered during and after the financial crisis; a taxpayer bailout; a rogue-trading scandal and an admittedly central role in the manipulation of benchmark interest rates.
While populist attacks on bankers have died down in the U.S., they remain widespread in Europe. In Switzerland and the European Union, politicians and regulators regularly lambaste bankers for their rich pay packages and are pushing to hold bank executives legally responsible for their employees' actions.
At UBS' annual meeting last May, angry shareholders protested against management pay packages in the wake of a $2.7 billion loss. One investor held a collage that featured the phrase "Ripped Off!" in German and mimed an exaggerated shedding of tears.
The 53-year-old Ermotti, who became CEO in late 2011 after the abrupt resignation of the bank's previous boss, has been trying to clean things up at UBS. He has shrunk the bank's balance sheet and tried to reduce the importance of its loss-prone investment-banking arm. And he is trying to instill a new culture in the bank's roughly 60,000 employees around the world.
UBS, however, remains a lightning rod for controversy. The latest instance: The bank is under investigation by Swiss, British and U.S. authorities for its role in the potential manipulation of currencies. UBS has suspended at least one employee.
"It is frustrating to see these kinds of issues are popping up," Ermotti said of the currencies investigation. "We try to the extent possible to take the lessons learned from past issues" and use them to avoid future mistakes.
But Ermotti, a Swiss native who has spent his entire career in the banking industry, said he is growing frustrated with what he sees as some regulators, politicians, shareholders, clients, journalists and rival banks holding UBS to a higher standard than they hold themselves.
"When I look around, I don't think there are many banks that can come to us and say they are the example that should be followed," he said. Speaking of a broader group of industry "stakeholders," including regulators and politicians, Ermotti said: "None of them can be overly critical."
Ermotti's remarks are reminiscent of those made in the past by other bank executives about what they perceived as excessive banker bashing. Former Barclays PLC CEO Bob Diamond, for example, told British lawmakers in 2011 that "there was a period of remorse and apology for banks. That period needs to be over." The next year, Diamond was forced to resign after Barclays admitted trying to rig interest rates.
At the World Economic Forum last week, the banking industry's continuing behavioral problems were a hot topic. In a private meeting held between bank CEOs and central bankers and regulators Friday, several participants pointed to banks' "conduct" issues as undermining efforts to rebuild public and investor confidence in the industry, according to executives and central bankers who were there.
"Whether or not [the industry] thrives will rest on the efforts of individuals and organizations to re-establish the system's reputation for integrity," Bank of England Gov. Mark Carney said in a speech in Davos.
Ermotti, who in the past also has spoken out against banker bashing, said in the interview that most of the bad behavior that has landed UBS and others in hot water was caused by small groups of rogue employees and doesn't reflect broader cultural problems in the industry. "It's not because you're a banker that you're a criminal," he said.
Ermotti also disputed the widely held notion that the woes of Europe's banks have hurt the continent's economy.
"Many people blame banks" for Europe's economic troubles, he said. "It's just an absurd concept. We all see that by now it's a little more than a financial crisis. In Europe, who thinks banks are responsible" for the underlying state of the economy?
The banking industry, he added, "is an easy target."
—Andrew Morse contributed to this article.
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How do you think 85 men now control more wealth than 3.5 billion people.
THEY STOLE IT!!!!!!!!!!!! I want my money back Mr. CEO guy...............
You know, one of the concepts my parents taught me was "With privilege comes responsibility". The privilege of the office of CEO and the ability to make decisions and shape policy and enforce standards of conduct and honesty were yours, and you chose to t make use of the privilege of the power and the pay, but took no responsibility for your dishonesty and mismanagement. Not just you, you have other people to keep you company who are equally guilty and responsible. You think that the public spends too much time bashing banks? I think they should spend more time seeking out alternatives to banks.
Banks highly regulate/scrutinize their employees yet find disdain when put under the microscope themselves.
If I'm questioning anybody, it's those holding my $$$.
"Life is hard enough, and I think this constant lecturing on ethics and on integrity by many stakeholders is probably the most frustrating part of the equation. Because I don't think there are many people who are perfect," Ermotti said"
This from a group of folks that had to be Shamed into ending Payday type Loan Shark Loans years after the FACT. This from a Group of Folks that are still Reaping the Rewards from literally destroying the Global Economy. The Banks are now even far Bigger than before the Great Recession. They still are Too Big to Fail, Too Big To Jail, yet they are still whining.
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