wealth management and business banking (the cash cow, which should remain Swiss); the investment bank (the, I suppose, newsworthy bit, which should be moved to the UK or the US); the already-created radioactive waste vehicle; and the asset management arm and the Pascual and Australasian subsidiaries, which should be sold off to raise money. Lars Toomre wonders "...when UBS will be issuing the press release that they no longer have a fixed-income sales and trading business... How UBS as institution allowed itself to take on some $100 billion in mortgage and structured credit assets that have resulted in write-downs thus far of approximately $38 billion is simply incomprehensible."

Meanwhile, the Citicorp/Travelers merger in 1998 that created Citigroup was a mistake, says... John Reed, the man behind it.

“The specific merger transaction clearly has to be seen to have been a mistake,” Mr Reed said.

“The stockholders have not benefited, the employees certainly have not benefited and I don’t think the customers have benefited because our franchises are weaker than they have been.”
Citi’s shares have lost more than half their value in the past year and it has been forced to raise $30bn to bolster its balance sheet in the wake of the subprime crisis. Once-smaller rivals such as Bank of America and JPMorgan Chase are now worth more...

Thoughts arising:
1. Most mergers destroy shareholder value. And the larger the merger, the more likely it is to fail. Another data point to add to the list headed by AOL Time Warner.

2. And in this case, of course, one can't blame a self-interested advisory bank for pushing an unsuitable merger on an unsuspecting client in order to get fees, because, well, the merger was between two banks.

3. Stockholders, customers and employees may not have benefitted, but Reed himself didn't do too badly. The year after the merger went through he made $26.4 million in compensation despite poor performance at the bank and heavy layoffs - enough to raise eyebrows even at the boom-era New York Times. That's a lot of money for causing so much damage. Note, though, that it's ten years ago - even under clawback proposals, Reed's money would now be quite safe.