UBS Hires Goldman’s Chung as Investment Bank Counsel
UBS AG (UBSN) hired Chul Chung from Goldman Sachs Group Inc. to be co-general counsel for its investment bank as Switzerland’s largest lender navigates the biggest overhaul of U.S. financial regulation since the Great Depression.
Chung, who worked at Goldman Sachs for 16 years, most recently as head of derivatives clearing strategies in its securities division, will begin in the newly created position in New York in late October, UBS General Counsel Markus Diethelm said in an Aug. 4 memo to employees. Spokeswoman Kelly Smith in New York confirmed the contents of the memo. Chung will work alongside David Graham, now general counsel to the investment bank, who becomes co-general counsel.
His work will “help the investment bank more assertively play a role in industry discussions regarding market structures and regulations, and -- critically -- to ensure that the investment bank remains in full compliance with all relevant laws and regulations in the markets in which we operate,” Diethelm said in the e-mailed memo.
Chung is at least the second hire UBS has made from rivals this year to help it deal with the changing market infrastructure. Paul Hamill joined the bank in June from Barclays Capital as chief operating officer in U.S. credit trading in Stamford, Connecticut, Smith said.
President Barack Obama last month signed financial-industry legislation into law that will give U.S. regulators oversight of privately negotiated derivatives markets. The law creates a mechanism for liquidating failing financial firms whose collapse could roil markets and creates a consumer bureau at the Federal Reserve to monitor banks for credit-card and mortgage lending abuses.
As part of the rules, banks will be required to move much of the $615 trillion over-the-counter derivatives market through clearinghouses designed to absorb losses from the failure of a dealer or major investment firm. The measure was prompted by the collapse in 2008 of Lehman Brothers Holdings Inc. and near-bankruptcy of American International Group Inc., which had sold derivatives protecting banks against losses on mortgage-linked securities.
The Basel Committee on Banking Supervision also is proposing rules that would impose higher capital requirements on banks worldwide. The rules would tighten control of what goes into banks’ calculation of risk, redefine what counts as capital and levy higher charges against holdings including derivatives.
Chung, reached on his mobile phone, declined to comment.
While at Goldman, Chung worked with industry committees of the International Swaps and Derivatives Association as the Federal Reserve Bank of New York and other regulators pressed dealers to curb risks from derivatives markets and to begin moving trades through clearinghouses. Chung, a graduate of Georgetown University’s law School, spent the first three years of his career at New York law firm Skadden, Arps, Slate, Meagher and Flom LLP, Diethelm said in the memo.
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