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Was That Wrong? Should Carsten Kengeter Not Have Done That?

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As you may have heard, the last 6 to 12 to 36 months months have been somewhat trying for UBS investment bank chief Carsten Kengeter. Profits haven't been exactly what he'd hoped for, the people of Stamford have (more or less) vowed to beat him with a sack of reeds should the Swiss so much as entertain the idea of leaving Connecticut, employees won't stop jumping down his throat for one second about getting paid, there was the somewhat unfortunate matter of a $2 billion fraud coming to light, no one will give his team credit for their legitimate months and, to top it all off, it looks like he might not get that promotion he's been gunning for and was hinted he was in the running for in his last annual review. Most recently, he's been tasked with firing a whole bunch of employees, a sore point for those not thrilled about potentially loosing their jobs or seeing their colleagues let go. And so, despite all the stress he's been going through, despite the higher-ups in Zurich riding him like Zorro, and despite things really not going his way, Kengeter dug deep and summoned the troops for a morale boosting session, the message of which he thought would've been a big hit.

At the dinner with banking heads of several divisions inside the embattled bank, held to discuss strategy and rally the troops, Kengeter, 44, implored the bankers to make a more concerted effort to streamline the firm and likened the strategy to slashing expenses like a “Jewish shopkeeper,” according to one attendee. However, rather than breed enthusiasm, Kengeter’s comments deflated morale and infuriated some bankers. “It didn’t sit well with me,” said a person familiar with Kengeter’s comment. Kengeter only recently offered a personal apology to attendees of the event when he was in New York in the past few weeks, sources say.

In fairness to CK, he would've never said those things had he not been momentarily confused as to which event he was working. Tuesdays are UBS dinners, Wednesdays are cross burnings. Honest mistake, won't happen again.

Some of his best friends are shopkeepers [NYP]

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UBS's Investment Banking Head May Have To Slash His Own Expenses "Like A Jewish Shopkeeper"

As those of you keeping up with the many trials and travails of UBS know, the last couple years have been fairly brutal for investment banking chief Carsten Kengeter. Pre-tax IBD profit was down 55 percent YoY through June, employees are constantly on his ass about getting paid, the comments he made in attempt to "rally the troops" re: "slashing expenses like a Jewish shopkeeper" were totally taken in the wrong way, some guy perpetrated a $2 billion fraud (which was partially to blame for CK getting passed over for the promotion he was gunning for), and to top it all off, the higher-ups actually accepted his offer to forgo a bonus for 2011, which he would never have put out there if he thought they'd actually go for it. And now, as a thanks for all his hard work, management is publicly mulling the idea of lightening his load and paycheck. UBS is weighing a shakeup at the top of its investment bank that would give a reduced role to Carsten Kengeter and increased responsibilities to his co-head Andrea Orcel, three people with knowledge of the matter said. The board is meeting in New York today to consider a reorganization of the unit that will include cuts centered on the fixed-income operations that Kengeter has been responsible for since 2008, said the people, who asked not to be identified before the matter is made public. An announcement may come when UBS reports third-quarter earnings on Oct. 30, they said...Three senior executives who declined to speak publicly said they expect Kengeter to leave the bank before long. A person with knowledge of Kengeter’s thinking said he doesn’t plan to go. A UBS official declined to comment. Ermotti told staff in a memo this month he’ll take “all actions necessary” to tackle the “paradigm shift” in banking and will continue “remodeling” UBS. He said in July that the market environment has completely changed since the bank announced reorganization plans for the securities unit in November. UBS May Reduce Kengeter Role in Overhaul of Investment Bank Unit [Bloomberg] Related: Was That Wrong? Should Carsten Kengeter Not Have Done That?