Can European Traders Be Trusted?

When the news emerged this morning that a 31-year-old London-based trader for Swiss banking giant UBS caused a $2 billion loss through rogue trades that stunned a banking industry that really does not need to be stunned right now, the news was perhaps not as surprising as it should have been.After all, it has been less than four years since Société Générale lost 4.9 billion Euros thanks to fraudulent transactions created by Jérôme Kerviel. Then, of course, there is last year's story of Steven Perkins, the Brit who got drunk and bought 7 million barrels of oil.Police in London arrested this latest rogue, Kweku Adoboli, after UBS reported that it could report a loss for the entire third quarter thanks to the trade. Shares in UBS AG plummeted 8.7 percent to 9.98 francs ($11.41) on the Zurich exchange.Tobias Lux, a Finma spokesman, told the Associated Press that, “From the scale of this case you can be sure that it's the biggest we've ever seen for a Swiss bank."So the question is, what is going on in Europe that is allowing these three men to have such a huge impact in less than four years? There was apparently nothing in the histories of these men that hinted at what was to come.Philip Octave, Adoboli's former landlord, describes him as, “Not the tidiest. He was not a party chap. I found no problems.” A regular early-30's guy then. Surely, this is a question of regulations. Just how much tighter they can get following the previous two rogues is unclear. But these European gamblers need to be stopped.