Zurich/Istanbul: Bernard Madoff and R. Allen Stanford could probably go unnoticed in the streets of Zurich. The Swiss are too busy berating Marcel Ospel, who has gone from being Switzerland’s most respected banker in 2007 to the most hated.
The former UBS AG chairman, rated the most influential Swiss two years ago, has become the public face of the financial crisis. Television comedian Mike Mueller made him the butt of jokes, rapper Gimma, real name is Gian-Marco Schmid, sang a satirical song outside his villa and the newspaper Blick demanded he repay bonuses. He may get a hostile reception at next week’s Basel carnival, a masked march that Ospel has been joining since he was seven years old.
Failed ambitions: Former UBS AG chairman Marcel Ospel. Sebastien Bozon / Bloomberg
As Citigroup Inc.’s Vikram Pandit and Fred Goodwin of Royal Bank of Scotland Group Plc. endured public grilling from US and UK lawmakers, Ospel was in seclusion in Switzerland. The 59-year-old is the target of outrage after earning more than any other Swiss banker while running up the largest losses. Many Swiss blame Ospel for importing the American financial crisis to Zurich, and would welcome the chance to tell him so.
“I’d like to say to him: ‘You’ve damaged Swiss banking’,” Fredi Sturzenegger, a retired official from a union of bank employees, said as he left the Sternen bratwurst stand—around the corner from Zurich’s Kronenhalle, one of Ospel’s favourite restaurants. Ospel’s ambition was to be at the top. Today, UBS stands almost at the bottom.
In 2007, Ospel seemed close to achieving his ambition. That year, the Zurich-based business magazine Bilanz placed him atop its annual list of the country’s most powerful people.
After creating the world’s biggest wealth manager in 1998 with the $19.7 billion (Rs98,300 crore today) merger of Swiss Bank Corp. and Union Bank of Switzerland, he vowed to turn it into the largest global investment bank. That required a larger presence in the US.
Ospel, who worked for Merrill Lynch and Co. from 1984 to 1987, bought New York-based broker Paine Webber Group Inc. for $11.5 billion in 2000 and oversaw the purchase of about $100 billion of US asset-backed securities. By April 2008, UBS had lost $38 billion on those securities, and shareholders applauded when Ospel stepped down as chairman at the bank’s annual meeting. When Bilanz published its 2008 list of movers and shakers, Ospel wasn’t on it.
This month, UBS reported a loss of 19.7 billion Swiss francs (CHF) for 2008 (Rs85,380 crore today), the biggest ever by a Swiss company. It also agreed to pay $780 million and disclose the names of hundreds of account holders to avoid US prosecution on a charge that it helped wealthy Americans evade taxes.
One day after the agreement, described by Swiss media as the beginning of the end of bank secrecy, the US sued UBS to force disclosure of as many as 52,000 American customers, who allegedly hid their Swiss accounts from tax authorities. That’s given the Swiss a new stick to beat the former UBS chief with.
Ospel and his like have truly failed the country, Delemont-based newspaper Le Quotidien Jurassien said in an editorial on 20 February, while Suedostschweiz said Ospel’s efforts to grab market share for UBS in the US had left its home country in a shambles. “Ospel’s fall was so steep because he’d risen so high,” said Dirk Schuetz, Bilanz’s editor and author of a 2007 biography of Ospel, The Master of UBS. “This is a stigma he’ll have for the rest of his life.”
Ospel declined to be interviewed for this story. His spokesman, Joerg Denzler, said the former banker has become a private person since he left UBS.
UBS has posted write-downs in excess of $50 billion stemming from the collapse of the subprime mortgage market, more than any other European bank. The lender’s shares have fallen 85% in the past two years, almost double the drop for the benchmark Swiss Market Index.
Ospel received almost 137 million CHF in salary as chief executive and later chairman of UBS from 2000 through 2007. In 2006 alone, he was paid 26.6 million CHF in salary and bonus, 66% more than the 16 million CHF Walter Kielholz got as chairman of Credit Suisse Group AG, Switzerland’s second biggest bank.
“It’s not fair to make Ospel the only scapegoat for the UBS meltdown,” said Wolfgang Matejka, who oversees about $3 billion as chief investment officer at Vienna-based Meinl Bank AG. “Ospel is a more tragic figure in a Greek myth than sole culprit.”
Still, he became the main target for the Swiss media and public. At the height of that campaign, Gimma improvized a concert outside Ospel’s villa, performing a song called Life Sucks. Gimma ended his performance by leaving 60 CHF, a supermarket voucher and two cans of beer in front of the house.
“There is anger among a large part of the population,” said Felix Rudolf von Rohr, who worked with Ospel at Swiss Bank Corp. about 30 years ago and now heads a committee that organizes Fasnacht, the three-day Basel carnival. “It’s only natural that it’s also directed at Ospel.”