From the BBC:
Police in London have arrested a 31-year-old man in connection with allegations of unauthorised trading which has cost Swiss banking group UBS an estimated $2bn (£1.3bn).
Kweku Adoboli, believed to work in the European equities division, was detained in the early hours of Thursday and remains in custody.
UBS shares fell 8% after it announced it was investigating rogue trades.
The Swiss bank said no customer accounts were affected.
One question is what ramifications such a write-down might have on the bank’s liquidity. In this cloudy and dark financial atmosphere, fire-sales of assets to pay down such a loss might spark panic.
Another question is how — after the Jerome Kerviel and Nick Leeson debacles — does a large financial fail to effectively monitor its staff’s trading activities? Hasn’t investment banking experienced enough of these rogue trading shocks to put a system in place to prevent these kinds of activities?
After all, if a too-big-to-fail bank suddenly implodes, the state is perfectly willing to stand-by to inject in the earnings of future generations to “save the system”