He told members of the Parliamentary Banking Standards Commission (PBSC) that cleaning up the bank’s act and ridding it of the culture of arrogance that had developed over time was a top priority for the UBS board.
“Everyone is about changing culture and conduct but, honestly, can I tell you that we are along the road of correcting it but we are not completely there,” he said.
We all got too arrogant, too self-convinced that things were fine the way they were
Orcel was being cross-examined by members of the commission, which is chaired by Andrew Tyrie MP, on the Libor-rigging scandal which saw the Swiss bank fined £940m last year by US, Swiss and UK regulators, including the Financial Services Authority, for serious misconduct on an “epic scale” over the benchmark interest rate.
“The industry went through a transformation of unrestricted growth, availability of leverage and we all got too arrogant, too self-convinced that things were fine the way they were,” he said.
Orcel told the commission that only a small group of UBS traders – put at 40-strong by the FSA – had been implicated in the Libor rigging and that top management was unaware of their fraudulent activities. He said, “people were appalled, upset and angry that their reputation was dragged down by the actions of others.”
He said that 18 of them, who still were working for the bank when the scandal broke, had been sacked. He did not clarify whether any of the others who had been identified were still UBS employees.
In further proceedings this morning, the commission expressed its astonishment at the claim that top management was unaware of what was going on – according to a report from Reuters, four former UBS executives, who included ex-chief executive Marcel Rohner, admitted that the first they heard of the bank's involvement in rigging Libor was from press reports in 2011.
“The level of ignorance seems staggering to the point of incredulity,” Tyrie told them.
Rohner said he was “shocked” and “ashamed” when he read about the rigging, but denied negligence. He explained that during his 20 months as chief executive (from 2007 to 2009) he had been trying to save the bank from collapse and was unaware of the misconduct.
“The times I was leading this institution were so extreme, I was fighting permanently for survival. I did the best I could,” he said.
During that time, UBS had to go cap in hand to shareholders for cash on a regular basis as it was forced to write down more than $50bn (£31.2bn) worth of mortgages during the global financial crisis.