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A Plea To UBS For Another Year Of Record Bonuses For Its Bankers


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Jan 17, 2010
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New Jersey
It has been a while since we have referred to Bloomberg columnist Jon Weil. The reason is we were waiting for something juicy, something one can sink one's teeth in, using money from a "tax free" Swiss bank account to pay. The need to wait is now over, as Weil explains why preserving the Swiss bank's bonus pool is right up there in the list of national priorities for the Swiss country as preserving the illusion that only you and your banker know who is behind that "numbered" account, in "Swiss Must Save UBS’s Bonus Pool or Die Trying." Cutting to the chase: "this year’s UBS bonus pool isn’t doomed, per se. It’s “at risk.” And where there’s a risk there’s always a way. What the UBS bankers need is a plan to ensure that the people who bear this loss are people other than themselves. Luckily, I have prepared one. To save the UBS bonus pool, UBS’s leaders must persuade the people of Switzerland to eat the losses the company is blaming on Kweku Adoboli, and to do so with joy in their hearts. Impossible, you say? Consider the following talking points.
Quote Weil's list of record-bonus preserving arguments:

No. 1: Reimbursing UBS for the $2.3 billion would be an investment in the countryÂ’s future.

Surely it will cost Swiss taxpayers much more money later if they skip paying this small ante now. UBS’s writedowns during the last financial crisis topped 50 billion francs ($56 billion). To keep UBS afloat, the Swiss government put up 6 billion francs of bailout dough and took almost 40 billion francs of rotting assets off the company’s books. Better for the Swiss to nip these new “rogue trading” losses in the bud while they can.

No. 2: If the bankers donÂ’t get their bonuses, the best and brightest UBS employees will leave for competitors.

Somebody has to stick around to clean up the mess being pinned on Adoboli. The Swiss must decide: Do they really want all of UBSÂ’s best talent to leave for National Bank of Greece? Or worse, Deutsche Bank? This, too, would inevitably lead to even bigger losses later, which brings us to our next point.

read more A Plea To UBS For Another Year Of Record Bonuses For Its Bankers - A (Tax Haven) Lampoon | ZeroHedge

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