- Pressure to deliver may lead to inappropriate behavior
- Swiss bank stepped up oversight after financial penalties
UBS Group AG Chief Executive Officer Sergio Ermotti told executives that a “degree of tolerance” for honest mistakes should be fostered so the fear of errors doesn’t paralyze business, according to a person with knowledge of the remarks.
Employees might avoid pursuing legitimate opportunities due to a culture of caution that has spread through banking since the financial crisis, Ermotti told about 300 executives in Zurich, said the person, who asked not to be named because the comments weren’t public.
UBS has paid dearly for employees’ misconduct since the financial crisis. The bank lost $2.3 billion through unauthorized trading and had to pay more than $2.8 billion for attempts to rig the London Interbank Offered Rate and foreign exchange rates. The lender pleaded guilty earlier this year to breaking the terms of a non-prosecution agreement.
UBS has since stepped up oversight of employees, including tightening the rules governing how they can trade securities for their personal accounts.
Employees should understand the difference between misconduct and honest mistakes, Ermotti said. Managers shouldn’t place staff under intense pressure to deliver on certain metrics because that can lead to inappropriate behavior, he said.
The Financial Times reported on the meeting earlier.