JUNE 2001 — It was a different era for investment banks in general and UBS in particular. The big Swiss bank had spent $12.5 billion the previous year to buy PaineWebber and bulk up its U.S. presence. The bank was “hell-bent on forging an American investment banking powerhouse,” we said in “Taking on America.” Our article cited then-president Luqman Arnold declaring UBS’s objective as nothing less than becoming one of the top five investment banks in the U.S., and quoted then-chairman Marcel Ospel as saying the group’s U.S. bankers “will enjoy the level of autonomy they need to operate successfully.” “If UBS fails,” we concluded, “it won’t be for lack of money.” Seven years later the bill has come in, and it is steep. UBS has taken $37 billion in write-downs on U.S. mortgage-backed assets and other securities in recent months, replaced Ospel with lawyer Peter Kurer as chairman and vowed to reduce risk-taking at its investment bank — all of this under pressure from Arnold, whose Olivant Advisors has taken a stake in UBS and demanded a change in strategy to focus mainly on wealth management.
