Kweku Adoboli's risky bets fuelled by City-wide 'addiction'
City rife with undiagnosed gambling addicts and giant losses that hit the headlines are just the tip of an iceberg, says trader
A London trader says there are 'absolutely thousands' of undiagnosed gambling addicts in the City. Photograph: D Burke/Alamy
The City is rife with gambling addicts whose habits contribute to a risk-prone culture of the sort which helped Kweku Adoboli lose UBS £1.5bn, according to one London trader.
Adoboli's trial heard that the 32-year-old lost £123,000 with a spread betting firm in just one year, and had taken out more than half a dozen short-term loans despite a combined annual salary and bonus of £360,000. Simon Taylor, one of Adoboli's desk colleagues, told the trial that such private trading was widespread at UBS.
The risky, off-the-books bets carried out by Adoboli during his job were likely to be another symptom of a wider addiction to gambling, said the trader, who asked not to be identified.
"There are absolutely thousands of undiagnosed gambling addicts in the City. The difference is that the odds are slightly more in your favour than if you're gambling in a Ladbrokes, and so there are many more people who can be successful gambling addicts."
Such an addiction, inevitably, affected work decisions, he said: "There are human emotions and you're dealing with things that shouldn't be emotional. That, for me, is the crux of the matter. Trading decisions should be pragmatic, but they're not, especially when you're trying to recoup losses like he was."
Some trading houses had brought in psychologists to look at this, he said, adding: "But for some reason, with the banks it's still the bottom line is all that matters."
Separately, the trader said, he was aghast that UBS had supposedly failed to pick up on the extent of Adoboli's side deals in his job, something now being investigated by Swiss and UK regulators:
"When I put on a trade, just to click the button on my mouse I have to have limits set, and from there it goes through at least four or five individuals over the course of a day. Overnight, all your positions are assessed. If you avoid those processes, someone has to let you avoid those processes."
He added: "If someone wants to commit a fraud they will. There's not a huge amount you can do about it. But ever since Barings I don't understand how there's an internal system at a bank that doesn't automatically prevent them from doing things like that, or else someone overseeing it. That, for me, is the real surprise. If not, inevitably something like this will happen."
While there had been a handful of cases of giant losses racked up by banks in such ways, the trader said, this was the tip of an iceberg: "It's happened, I promise you, at least 100 more times when it's not big enough to make a news story, so we never hear about it."
http://www.guardian.co.uk/business/2012/nov/20/kweku-adoboli-bets-city-addiction
Adoboli's trial heard that the 32-year-old lost £123,000 with a spread betting firm in just one year, and had taken out more than half a dozen short-term loans despite a combined annual salary and bonus of £360,000. Simon Taylor, one of Adoboli's desk colleagues, told the trial that such private trading was widespread at UBS.
The risky, off-the-books bets carried out by Adoboli during his job were likely to be another symptom of a wider addiction to gambling, said the trader, who asked not to be identified.
"There are absolutely thousands of undiagnosed gambling addicts in the City. The difference is that the odds are slightly more in your favour than if you're gambling in a Ladbrokes, and so there are many more people who can be successful gambling addicts."
Such an addiction, inevitably, affected work decisions, he said: "There are human emotions and you're dealing with things that shouldn't be emotional. That, for me, is the crux of the matter. Trading decisions should be pragmatic, but they're not, especially when you're trying to recoup losses like he was."
Some trading houses had brought in psychologists to look at this, he said, adding: "But for some reason, with the banks it's still the bottom line is all that matters."
Separately, the trader said, he was aghast that UBS had supposedly failed to pick up on the extent of Adoboli's side deals in his job, something now being investigated by Swiss and UK regulators:
"When I put on a trade, just to click the button on my mouse I have to have limits set, and from there it goes through at least four or five individuals over the course of a day. Overnight, all your positions are assessed. If you avoid those processes, someone has to let you avoid those processes."
He added: "If someone wants to commit a fraud they will. There's not a huge amount you can do about it. But ever since Barings I don't understand how there's an internal system at a bank that doesn't automatically prevent them from doing things like that, or else someone overseeing it. That, for me, is the real surprise. If not, inevitably something like this will happen."
While there had been a handful of cases of giant losses racked up by banks in such ways, the trader said, this was the tip of an iceberg: "It's happened, I promise you, at least 100 more times when it's not big enough to make a news story, so we never hear about it."
http://www.guardian.co.uk/business/2012/nov/20/kweku-adoboli-bets-city-addiction
Posts
No comments:
Post a Comment