In October, it is ten years since the Swiss government bailed out UBS. What happened to the key actors in the drama since?
October 16, 2008, is a historic date for Switzerland: the government resorted to emergency laws to rescue an ailing UBS with 6 billion Swiss francs ($6.2 billion). In addition to that, the country’s central bank, the Swiss National Bank (SNB), issued a guarantee for bad securities of as much as 62 billion francs.
The historic events of ten years back today make for a relaxed read given what we know how things develop since. The government and SNB steps were successful, and the country even made a profit from the rescue deal. Ten years ago, this was all far from obvious and the involved players in the unfolding drama had no experience with such drastic measures.
So what has happened to those concerned players since? Here’s what finews.com found out about the eight main players in the Swiss banking crisis of a century.
1. John Costas: Warhorse
His «baby» never learned to walk: John Costas wanted to run Dillon Read Capital Management (DRCM) as a hedge fund under the roof of UBS. A vehicle equipped with $3.5 billion in capital and 120 of the bank’s best traders. Costas, who had built UBS’ investment bank into a leading Wall Street firm, got his way.
UBS gave the go-ahead for DRCM in 2005 – and, in spring of 2007, it pulled the plug. Its assets were transferred to the mother ship, among those billions of potentially risky subprime derivatives. A substantial portion of the 40 billion francs that UBS had to write off reportedly stemmed from Costas’ books. The 61-year-old banker is still in business. He recently told finews.com that he managed a small investment firm with nine members of staff.
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