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    Banking Stock Review; UBS raises Loss from Unauthorized Trading to $2.3B

    Banking Stock Review; UBS raises Loss from Unauthorized Trading to $2.3B

    Swiss bank UBS AG (NYSE: UG) today said that its losses from unauthorized trading amount to $2.3 billion and not $2 billion as initially reported.

    The announcement from Switzerland’s biggest bank comes after last week’s disclosure that Kweku Adoboli, a trader in its Delta One team, conducted unauthorized trading. Initially the company said that its losses from the unauthorized trades amounted to $2 billion.

    In a statement, the bank said that the positions taken were within the normal business flow of a large global equity trading house as part of a properly hedged portfolio and the magnitude of risk was masked by fictitious positions.

    UBS said that it might post a loss in the third quarter as a result of losses from the unauthorized trades. However, the bank has enough capital on its balance sheet to take the impact of the loss from unauthorized trades.

    Meanwhile, Oswald Gruebel, CEO of UBS, in an interview with Swiss TV, said that he is ultimately responsible and will have to take consequences. However, Gruebel told Swiss newspaper, Der Sonntag, that he does not plan to resign because of the loss.

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