UBS admits mistakes in subprime mortgage crisisb

UBS admits mistakes in subprime mortgage crisisBasel, Switzerland  -  European bank UBS AG chairman Marcel Ospel faced a stormy shareholders' meeting Wednesday acknowledging that the group had made a mistake after the Swiss financial giant emerged as a major victim of the US subprime mortage market crisis.

The worst hit of its global rivals, Zurich-based UBS has been forced to make more than 37 billion dollars writedowns in assets stemming from the US housing shakeout, which has set shock waves across the world financial sector.

Ospel has already announced his departure and the company has faced calls for it to be split up.

"We have made mistakes, and we have learned our first lessons from them," Ospel told the 4,000 angry shareholders attending the meeting in Basel. "Our future management will continue to learn from the things we did wrong."

While the meeting was underway, UBS edged up marginally by 0.4 per cent in early trading. However, the bank's stock has plunged almost a third this year as details of its exposure to risky US mortgage investments have emerged.

The trauma that has engulfed UBS has badly shaken Switzerland, with the nation's biggest financial house having built up a reputation for caution and adopting a conservative approach to banking.

In a 50-page report to UBS shareholders released ahead of the AGM, UBS admitted that a failure of its risk control systems and a drive to build up business in risky investments had contributed to its financial woes.

But speaking at the meeting, UBS chief executive officer Marcel Rohner, said the banking giant, which had to make writedowns totalling 19 billion francs (18.9 billion dollars) during the first quarter, had taken steps to reduce the risks it had recently taken on.

The bank, however, said Rohner was still facing risks with the UBS management asking the shareholders' meeting to sign off on a capital injection of about 15 billion francs. Last year, UBS ran up a 4.4 billion franc loss.

UBS's in-house lawyer Peter Kurer has been nominated to take over from Ospel as company chairman. (dpa)

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