UBS has yet to fully purge itself of a global interest rate scandal that has cost the Swiss bank its reputation and put it at risk of a wave of costly civil suits, its investment banking chief said on Wednesday.
The once-venerable institution was fined a record $1.5 billion last month for manipulating Libor interest rates, the latest in a string of scandals including a $2.3 billion rogue trading loss and a damaging tax avoidance row with the United States.
"We are very focused on recovering the honor and standing the organisation had in the past," Andrea Orcel told Britain's Parliamentary Commission on Banking Standards, set up in the aftermath of the Libor scandal.
"I am convinced that we have made a lot of progress. I am also convinced that we still need to do more."
Orcel said that UBS has fired 18 of the 40 people at the centre of the Libor rigging, which took place from 2006 to 2009. Libor, the London interbank offered rate, is used as a benchmark for pricing trillions of dollars of financial contracts.
Most of the remaining UBS staff implicated in the Libor scandal, including Tom Hayes, a trader who has been charged by U.S. prosecutors with conspiracy, wire fraud and antitrust violation, had already left the bank, Orcel said.
Andrew Williams, UBS's global head of compliance, told the committee that U.S. bank Citigroup had headhunted Hayes from UBS before the Libor scandal broke, prompting laughter in the committee room.
"What kind of reference did you give him?" Nigel Lawson, Britain's former finance minister, asked Williams.
"I believe he would have just got the standard reference," Williams replied.
Hayes no longer works for Citigroup.
Italian Orcel, who joined UBS in July, has been investment bank chief since November and is overseeing 10,000 job cuts and a retreat from fixed income.
He blamed a decade-long expansion at UBS for creating an unwieldy organisation with sometimes rotten corporate practices.
"There are certainly elements of our cultures which are negative and which we need to root out and are in the process of rooting out," he said.
Orcel, deemed a "deal junkie" by one committee member, was previously at Merrill Lynch, where he was slammed for taking a $34 million pay package in 2008 after advising on the disastrous RBS-led takeover of ABN AMRO.
Committee member Justin Welby, the incoming Archbishop of Canterbury, asked Orcel if he was the right man to turn UBS around.
"I feel I have a high level of integrity," the banker said.
Orcel said that UBS was working at simplifying the investment banking business to make it less risky and prone to scandal.
The committee, a cross-party panel of lawmakers headed by Conservative MP Andrew Tyrie, is switching its focus to standards and culture after spending most of the past three months assessing structural reform.
Tyrie on Wednesday described the Libor rigging as "a shocker of enormous proportions".
Former UBS chief executive Marcel Rohner will appear before the lawmakers on Thursday, flanked by Huw Jenkins, Jerker Johansson and Alex Wilmot-Sitwell, three former heads or co-heads of UBS's investment banking division.
Thomson Reuters, parent company of Reuters, has been calculating and distributing Libor rates for Libor's sponsor, the British Bankers' Association, since 2005.