Anmerkung der Redaktion: Lesen Sie hier die deutsche Version des Artikels. Dies ist das Original-SonntagsBlick-Interview mit Kweku Adoboli auf English.
Mr Adoboli, you have been a trader for the UBS. What does your daily routine look like today?
One great part of my life is that I help look after my friends’ kids. At the moment I am not allowed to live on my own because of the restrictions of the immigration bail process. So my friends look after me and put a roof over my head. One way to repay them is to help look after their kids.
Does the «kid work» fill up a day?
No. I spend a lot of time doing legal work. We applied for a permission to appeal at the Court of Appeal two months ago. We hope we will get a decision soon telling us whether we can bring that appeal. If that permission is not given, we will have to appeal at the European Court of Human Rights.
Did you have any success yet in your legal battle?
Yes. For example: during the first 16 months after I left prison, I was incorrectly advised by multiple lawyers and the Home Office that I wasn’t allowed to work. It was only after reading through legal cases and immigration rules going back to 1971, that I was eventually able to make the argument that I am allowed to work. The hard part of actually trying to find paid work has now been underway since mid-October. But it has been an honour to be asked by many different institutions to speak about my experiences through conferences, seminars and discussion forums. I am also preparing to begin study for a PHD at Edinburgh university.
What sort of PhD?
I hope my PhD will focus on the history of the financial industry and the effect of financialisation on our societies. I have the luxury of spending the rest of my days thinking about what needs to change in the finance industry. When you consider at the Brexit vote and the recent US presidential elections it seems both have been driven by a deep sense of disenfranchisement.
Do you really think that the financial industry is responsible for Trump being elected and the Brexit?
Much of the disenfranchisement that led to Brexit has to do with the lack of access to fair capital, it has to do with austerity policy versus quantitative easing, a lack of equality of outcomes. For example quantitative easing has been used to prop up the financial system. Trillions of dollars have been taken from our future generations to prop up the asset base. On the other hand we’ve had austerity policies that make poor people poorer. The finance industry is central to that. And so we come full circle, the finance industry is right in the middle of all this – it has to reconsider its purpose.
What is, in your opinion, the purpose of the financial industry today?
Its purpose now is to extract as much value as possible for those who own the assets. Out of all profits made, 60 percent goes to capital and 40 percent to labour. We should all be asking the finance industry to do more to fairly distribute the proceeds of human endeavour.
Sounds a bit anti-capitalist to me.
It does not have to be anti-capitalist. It is about capitalism that has become simply too extractive. The system just needs to be fairer and must work to actively correct the balance and address the inequality. What I just told you about getting the profit ratios back into balance is not left-wing or Marxist. With the situation we’re in now, social inequality is growing and instability is growing – and that, ultimately, cannot be in the interest of the few who own the capital either. If 40 percent goes to capital instead of 60, that’s still a pretty good return. We have to stop trying to achieve growth at all cost.
A strong opinion for someone who had been working at the ETF and index desk of a bank – responsible for $50 billion of stocks...
It gave me a huge sense of responsibility to be part of UBS – an organisation with a common purpose, with everyone pulling in the same direction. The feeling of young Kweku: «I can really learn and contribute something here». And the older senior management people always told us that we had a special role to play in the world.
That the finance industry his helping the world to grow, to bring important efficiencies, bringing wealth and equality to all the corners of the globe. But after some years, you’re like: «Hang on a minute, that’s not what we are really doing!» Then there is the moment when it hits you: «What is the purpose of what I am doing?»
When was this very moment?
Early 2011 was the tipping point. We were achieving everything we were being asked to achieve. I said to my girlfriend: «We made $6 million of profits today. But I don’t feel happy. I am more concerned what all this activity means for the world and who or what it really serves». After a long conversation I decided to leave the industry.
But you did not! You kept on trading above your risk limit of $100 million which in the end resulted in a total loss of $2.25 billion for UBS.
Until 2011, no-one actually talked about risk limits. Even when there were risk limits in place. Even in the summer of 2011 I sent an e-mail to my boss, in which in explaining we’d made a $6 million of profit, by exceeding the supposed risk limits, I was congratulated. Then shortly afterwards he sent a second email: «Next time, just let me know be before you go beyond your limits, not after.» There was no sanction.
In a report the Swiss Financial Market Supervisory Authority (FINMA) confirms such an exchange of e-mails. But it also states that you were covering up the actual scale of your trading positions and the risk they posed. Was it ethically a problem for you to trade like that?
Well, we had a target to meet. There were senior managers coming to us saying: «You guys are not pushing the boundaries hard enough.» What you are effectively taught as a trader was that the ability to embrace risk is what defines good traders. And, speaking in hindsight, if that makes you good at your job in the eyes of your institution, the ethical question falls away. The culture in the institution drove the behaviour.
Isn't a bit easy to blame the culture or the system for what you did?
First of all it is important to remember that I was found Not Guilty of four charges because my jury agreed that I did not do any of this for my own personal gain. This is important because, paradoxically, it shows that I was always working in pursuit of the needs of my colleagues and the institution. I took responsibility for the trading loss on the desk. But I didn’t see myself as a criminal. We made mistakes, there was a loss, but I’m not a criminal.
So do you think it's unfair that you were sent to prison?
I don’t think in terms of what is fair and unfair. It is not healthy for me to think that way or about the degree of punishment I took. Sadly, the whole narrative of blaming an individual serves to prevent people questioning what drove us. That makes it difficult to stop this happening again in the future.
It is easier for UBS to blame everything on one single bad apple – on a ‘rogue trader’ as they prefer to call it. If one person can be seen to be the criminal, then it’s not a cultural and systemic problem in the bank anymore. The society wanted a banker’s head. The newspapers needed to say: they are all gamblers, and he is the biggest one. But the reality is we were just trying to achieve what we were asked to achieve.
In the end the UBS faced consequences, too. CEO Oswald Grübel stepped down in the aftermath of the loss. Do you feel sorry for him?
For me, it's not a matter about feeling sorry for individuals, Ossie Grübel included. But I must note that Ossie Grübel asked us all to take more risk in trading. By 2008 Swiss tax payers had to pay $60 billion to bail out the bank. So there was this powerful sense of duty to ‘rebuild’. But we could only do so by doing what we know, which is taking risks!
But in the end you seem to have changed the culture of UBS. Sergio Ermotti as the new CEO has cut down investment banking.
Yes. UBS has chosen to reduce its footprint in the investment banking. Does that mean that it has reduced its activities in the investment banking field? I suspect not, it has just automated. A lot. UBS investment banking is still highly profitable by its activities. The real question we ought to ask is not how big a bank’s footprint in investment banking is, but whether the entire finance industry serves a purpose that is to the benefit of our global society.