Erroneous and possibly unauthorized trades by one trader at UBS cost the Swiss bank $2 billion. The story has analysts worried about the bank’s lax financial controls — the problematic assets came to light only when the trader himself reported them — and also wondering about the extent to which the bank might be encouraging high-risk trading. There have been new calls for UBS to audit, spin off, or close its trading operations.
There is increasing concern in general about the solvency of the large banks in Europe. The situation has deteriorated so much that U.S. Treasury Secretary Tim Geithner is attending meetings of finance ministers there, promoting the idea of a European version of the Wall Street bailout of 2008.
Citibank announced new fees that are not as onerous as those implemented by its largest competitors. Customers can avoid the $10 monthly charge by maintaining a combined $1,500 balance in savings and checking accounts, or by paying at least one bill online per month while having regular direct deposits. Notably, Citi will not be charging account holders for debit card transactions. The new Citibank account maintenance fee takes effect in December.
