Marcel Ospel, UBS Architect Undone in Finance Crisis, Dies
Marcel Ospel, UBS Architect Undone in Finance Crisis, Dies at 70
(Bloomberg) -- Marcel Ospel, the architect behind UBS Group AG’s creation and the Swiss wealth manager’s first chief executive officer, died on Sunday after a long illness. He was 70.
The former executive died after many years battling cancer, Swiss newspapers reported, citing his widow. “We are deeply saddened,” said UBS spokesman Mark Hengel.
Ospel was the driving force in the merger between Swiss Bank Corp. and Union Bank of Switzerland to form UBS in 1997 and served as its chairman from 2001 to 2008. He left the bank under a cloud as soured investments led to a government bailout, and a U.S. tax evasion probe damaged the reputation of UBS and Swiss banking in general.
Ospel came to symbolize the importation of the U.S. financial crisis to Switzerland. In a bid to become the world’s biggest investment bank, he bought New York-based broker Paine Webber Group Inc. for $11.5 billion in 2000 and oversaw the purchase of about $100 billion of U.S. asset-backed securities. UBS had lost $38 billion on the securities by 2008, when it posted a full-year loss of 19.7 billion Swiss francs ($20.2 billion).
The bank also had to take some $50 billion in writedowns from the collapse of the U.S. sub-prime mortgage market in 2008 and later received $59.2 billion in an unprecedented bailout from the Swiss government. That prompted regulators to ask Ospel to step down as chairman.
Ospel, who was married three times and has six children, joined Swiss Bank Corporation in 1977, the year he received a bachelor’s degree in economics from the University of Basel in his home town. SBC would merge with Union Bank of Switzerland to create UBS.
He started his career at 15 via a banking apprenticeship at the Basel stock exchange bank Transvalor, according to Switzerland’s NZZ. He originally wanted to be a bricklayer, the newspaper said.
U.S. Stint
The executive worked at Merrill Lynch from 1984 to 1987 before returning to SBC where he would eventually become its CEO and later take that role at UBS. He was known to encourage a more casual dress style more in keeping with U.S. businesses than the more formal world of Swiss banking.
Two years after being rated the most influential Swiss in 2007, Ospel had become a public target, with comedians and muiscians joining in. Switzerland’s tabloid press criticized Ospel for dancing while UBS shareholders got burned, waltzing with his third wife at the Vienna State Opera Ball on Jan. 31, 2008, a day after the bank wrote down $14 billion in mortgage holdings.
Fresh from dealing with the aftermath of the financial crisis, UBS agreed to pay a $780 million fine in 2009 and disclose the account details of 4,700 clients to avoid U.S. prosecution on a charge that it helped wealthy Americans evade taxes.
The banker from the Swiss city of Basel received almost 137 million francs in compensation as CEO and later chairman of UBS from 2000 through 2007. “I ultimately take responsibility for the bank’s situation,” he said in an April 2008 statement.
Ospel was also publicly blamed for the collapse of embattled national airline Swissair Group in 2001. The carrier’s former chief executive officer later testified in court hearings that it had been “strangled” by a UBS-led plan with creditors that unnecessarily grounded the carrier. Ospel rejected those claims at the time.
Swissair Was ‘Strangled’ by UBS Plan, Ex-Chief Says
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