Fixing UBS’s risk management problems
Philip Lofts, group chief risk officer at UBS, talks to Alexander Campbell
Early 2007 saw a continuation of the business that had been so profitable in the preceding years, with subprime residential mortgage-backed securities and collateralised debt obligations of asset-backed securities still common. But there were clear signs of the problems to come. In May of that year, UBS shut its in-house hedge fund, Dillon Read Capital Management (DRCM), after it racked up massive losses on US subprime mortgages, later blamed on poor risk measurement and a lack of transparency
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