by da n i e l h e l lw i g ( ‘ 1 1 ) + HA M AD AL M UDHAF ( ‘ 1 1 )
The Future of Banking Secrecy Oswald Gruebel has been CEO of UBS since February 2009. The bank returned to profitability for the fourth quarter of 2009, with even its investment banking division reporting profits, and no longer being encumbered by large fair value adjustments. The editorial staff of the IBR had the rare opportunity to meet with Oswald Gruebel in Zurich, and learn about the future of banking secrecy, the current financial position of UBS, as well as some of Mr. Gruebel’s personal experiences. Mr. Gruebel, you started your career as an apprentice at a German bank. As of today, how important is a business education, as offered by institutions like Wharton? Today, you could not do it the same way I did it. When I started my career, you certainly did not have business schools in Europe, and in my own case there were special circumstances, anyway. I started my career very early and believe that at I have had success in banking because I worked all my life and I learned in the process while today students can learn how things should be done at university. Above all I believe in a practical approach to learning. For example, I like case studies because they are based on real situations. Sometimes students coming straight out of university only have theoretical knowledge and are then confronted with reality. For them, the real world might seem inefficient and difficult because there are people everywhere who want to claim their piece, and these people aren’t necessarily operating according to what you learned in university. But then the good news is that this is what makes it interesting. It is a continuous process of trying to improve how a company functions. Overall, my advice is to avoid becoming too specialized in your career or your studies.
S PRIN G 2 0 1 0
In the near future, and as a result of the financial crisis, is there any chance to actually get a global regulator for international financial markets? Unfortunately, where things currently stand it doesn’t seem so. The key point is that any global regulator would have to be sponsored by several governments. Those countries would have to give away some of their local control, and that’s why it is so problematic. You’re talking about the sovereignty of each of these countries. What is likely to happen is that each country, in consultation with the Basel Committee, will come up with its own rules – how the banks should be capitalized, what an acceptable leverage ratio is, what kind of risk banks are supposed to take, and how much these banks are allowed to pay their employees. We will have to see how it will work out but let us imagine, for example, that the Basel Committee comes up with certain standards that banks should have on capital leverage and liquidity. One of the problems will be when, for example, America says: “No, we cannot accept that, we have a special situation.” And then the United Kingdom comes and says: “We have an even more special situation.” Everybody in these matters tends to thin they have a special situation.