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UBS Can't Remember Where It Put $2 Billion

Our grade schooler just found a $10 bill we had misplaced in an old shirt pocket. We let her keep it because she was so excited. But what if like Swiss investment bank UBS, you can't find $2 billion?

Yes, UBS is telling the world this morning that a "rogue trader" racked up $2 billion in unauthorized trading losses and now the third quarter spreadsheets aren't looking so hot anymore. A 31-year-old UBS employee has been arrested in London. Oopsies. Via Bloomberg:

While the loss is "manageable" for UBS, it's "obviously not helpful for sentiment and confidence in the bank's risk management following the near-death experience of 2008-2009," said Andrew Lim, a London-based analyst at Espirito Santo Investment Bank, in a note. Lim had estimated third-quarter net income of 1.1 billion francs for UBS.

A $2 BILLION loss is "manageable"? There aren't very many companies that could say this with a straight face. And haven't we been told for a few years now how the banks are too big to fail? If a single employee can lose $2 billion without anyone in the company noticing as soon as it starts happening, then maybe you're too big to live? At the very least, we need far better banking regulations than we have now.

And I'm going to guess the $2 billion isn't tucked away in an old shirt pocket somewhere.

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