Rogue trader costs UBS $2 billion

[jhilly8982]

Originally Posted by masterserg

I agree. And I am still not convinced that one guy can circumvent the entire risk management and compliance departments ... with that amount of exposure? I wonder whose a$$ is really being covered ...

Yeah, no kidding. I am a trader, everyday my position is reported to my backers as well as my clearing firm. Everyday my risk is typed into a computer program that spits out my risk exposure on the upside and downside of the market. It is my responsibility to trade within our agreed upon parameters but it is also their responsibility to moniter to make sure I am staying within their parameters.

However, if I wanted to lie and fudge my risk slide to hide a position I could only get away with it for maybe a day because everything is electronic and run through an exchange.

Some of these larger institutions trade under call around markets in which exchanges aren't involved therefore the transparancy isn't always there, so it might be easier for large positions with a large risk exposure to go "unoticed" for some time. But still, whoever ran that trading desk had to have known what exposure his traders have on.