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The Swiss financial services company UBS has admitted that a “rogue” trader has run up a loss of 2 billion dollars in unauthorized risky trades. The 31 year old trader Kweku Adoboli who worked in the bank’s exchange traded funds desk was arrested at his apartment. UBS suffered similar losses to other banks in 2008 from risky property trading in subprime and other mortgage investments. The bank claimed that new risk management practices were put in place to avoid another crisis. However, the $2 billion loss this week raises the question whether the problem is a rogue trader or the bank itself. UBS is the same bank that in 2009 was forced to disclose the names of 52,000 of its American customers to the US government which claimed that the bank was helping to evade taxes through its offshore accounts. In a new Rolling Stone article, acclaimed author Matt Taibbi, takes issue with the characterization of a “rogue trader” as a reason for this latest crisis. In it, he discusses the disastrous marriage of commercial banking to speculators. The Glass-Steagall Act in the 1930s, introduced banking reforms that placed restrictions on financial speculation. But Taibbi reminds us that a 1998 Act passed during the Clinton administration repealed part of the Glass-Steagall Act. In his opinion, the term “rogue” is applied to cover up for the fact that situations like the $2 billion loss at UBS are indicative of a system wide problem. According to Taibbi, “`rogue traders’ are treated like bad accidents…But rogue companies are protected at every level of the regulatory structure and continually empowered by deregulatory legislation giving them access to our bank accounts.”

GUEST: Matt Taibbi, contributing editor of Rolling Stone Magazine, author of The Great Derangement, Spanking the Donkey, and Smells Like Dead Elephants. His latest book is Griftopia: Bubble Machines, Vampire Squids, and the Long Con that is Breaking America

Read Matt Taibbi’s article here: http://www.rollingstone.com/politics/blogs/taibblog/the-2-billion-ubs-incident-rogue-trader-my-ass-20110915