initially at barclays but subsequently at swiss bank ubs, and now the tax payer controlled are bs. it will doubtless show other banks were also at it for 2005 through 2010. -- now the tax payer-controlled rbs. fines being impose our for willful abuse of the system rather than for a specific amount earned as a result of it. investment banking boss is to be the sacrificial offering, even though he had no direct or indirect knowledge. >> there is definite pressure. we know there is pressure from the regulators. but they want to see scalps. they want to see various people fired. what i think is interesting is that the fine is being paid by the entire staff. 95% of them did not indulge in manipulating libor, and yet, they are paying for it. i firmly believe culture is set at the top of an organization, and if you set a culture that encourages wrongdoing, you need to leave, but i also think that individuals need to be held accountable. >> fines for libor abuse are enormous. ubs has paid 1 billion pounds. our bs -- rbs must now pay 390 million pounds, most of which will now go to american

. >> lenny breuer also forced the swiss bank ubs, as you know, to pay a big fine in the libor, the price fixing conspiracy. and that outraged you as well, didn't it? >> this is the, i think the biggest financial scandal of all time. it was a price fixing scandal where, essentially, some of the world's biggest banks got together and they conspired illegally to artificially rig the global interest rates which are based upon this london inner bank offered rate, which is a rate that measures how much it costs for banks to lend money to each other. this libor rate affects the prices of hundreds of trillions of dollars of financial products. and it goes from everything from credit cards to mortgages to municipal bonds. basically everything in the world the price is, you know, is somehow connected to libor. and these guys were monkeying around with this for individual profit. and they got, again, a complete and total walk on this. there were no criminal charges, which is just unbelievable. >> did you see the frontline documentary "the untouchables?" >> i did. >> then you're familiar with lanny

which birkenfeld told the government about that ultimately got ubs in so much trouble. the bank would sponsor lavish events like yacht races in newport and the art basel modern art festival in miami beach to attract wealthy americans. then it flew in its bankers from switzerland to mingle and to try and drum up new clients and conduct business with existing ones. because the swiss bankers weren't licensed to conduct business in the united states, it was a clear violation of american banking laws on u.s. soil, and birkenfeld provided internal documents that proved the length that ubs would go to in order to avoid detection. >> call it a vacation rather than a business trip. rather than saying, "oh, yes, i'm coming to see my private clients here in the united states. and i'm coming in from zurich, switzerland." >> did you bring records into the country with you when you came in? >> generally, no. i did not. my colleagues brought in encrypted laptops. >> encrypted laptops. >> yes, so that even if they were discovered, you couldn't see what was inside the computers, which were portf

generally speaking from regulators about where the pressure is going on their banks from here. >> we're electrifying it. >> ubs has posted a quarterly and full net year loss hit by a 1.5 billion dollar charge. the spanish banking giant promised to beat expectations in the fourth quarter. it's eventually going to shed 10,000 jobs. the equity fixed income, of course, carolin is in zurich, has been speak with the ceo and join us for more. hi, carolin. >> hi, ross. investors down know what to do with these results because now the stock is trading flat. it was down by as much as 3% when the stock first opened, it was up by more than 1%. now, numbers weren't bad because as you pointed out, the net loss was a little smaller than expected at 1.9 billion swiss francs in the quarter. we knew ubs was going to post a log, larmgly as a result of litigation provisions of more than 2 billion swiss francs. also because of restructuring charges, losses on its own debt. but, again, the net loss, a little smaller than expected. now, a couple very positive points to point out here, ubs managed to build up its capital levels, the

that is why we have this, as you say, the third such bank, the first was barclays, the second was ubsank of scotland. the third, with a penalty of more than $600 million which, i think, is serious and significt and hopefully it will send a strong and resounding message that don't mess with these markets. there are too important for consumers around the world. gerri: the investigations go on, but you're out for found lots of embarrassments. vr finding in the reporting today in this week there were literally hundreds of efforts to manipulate libor. it is astonishing to me because this -- let's describe whyhy ths is important. this determines how much to pay for a mortgage loan or any kind of loan our business loan. the end of the day if they're manipulating you have no control of their cost pressure absolutely righ. the are benchmark rates that said the interest rates that people pay for different currencies all of the globe. anything that anybody purchases with credit has the potential of being skewed. and, you know, that is just too important, not just americans, but people all across

bank of america, citigroup, ubs ag, they have been cutting staff for years now, they show no signs of letting up now. the problem, well despite the busy market driven by surprisingly few players, not so busy anything else, investment banks under pressure in their other fa far-flung businesses, y are squeezing the lemon to make whatever lemonade they can, cutting costs, managingic pengs, the likes of which we have not seen since after the famous meltdown, not good for those getting laid off, and not much better for those zombie-like survivors hanging on. their bonuses are down, and potential ripple effect is already clear. so let me be clear. whether these guys cough the economy often catches a cold. when they make big bucks they spend the big bucks, that is good for car sales, home sales, lots of sales, but those sales appear to be slowing down, a sign that corner of wall and brode's further lay offs will create more problems for the economy ro now? >>the rallye is nice, at bite we're going back to future. before it hit the fan, looking around now. maybe before everything hits the fan

they weren't as worried as other ones, bark lays and ubs, not worried about the image of the bank. >>unt window they could have gone. thanks for joining us an engaging us in this engaging debated. >>> "politico" reporting tim geithner will join the council on foreign relations as a distinguished fellow. talking about where he would land. >> whether or not it would allow -- >> he has a desk now probably across the way from bob rubin joining us tomorrow in the 8:00 hour and we will talk about the new desk mates. >> and we will talk with ceo jeffrey solomon and pimco's bill gross about america's bond equities and credit trouble and don't miss an exclusive interview with ceo, c pen 23ny johnson. jacq "squawk on the street." so i can react in real-time. plus, my local scottrade office is there to help. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. voted "best investment services company." i work for 47 different companies. well, technically i work for one. that company, the united states postal service®, works for thousands of h

america brought business to jpmorgan when they didn't go down the street to ubs or bank of america thatlittle bit tough for me. melissa, don't forget, listen, jpmorgan, like it or not were part of the tarp bailout. they took $100 billion from taxpayers. they invited government in. government will be a long term houseguest as far as they know. that is why the regulations are the way they are. >> they invited the government in? government forced its way in. >> they took the money. melissa: dennis kneale, talk. >> a lot of beating going up on jpmorgan. they're the biggest small business lender, probably in the world. >> subsidized. >> certainly in this country. i think jamie dimon is a great ceo. when he tried to say this shouldn't be legislated. should be up to the board and shareholders separating chairman and ceo there is no evidence it actually helped any companies. when he said worldcom, separate chairman and separate president. i think you guys are being too negative on jamie dimon. >> worldcom is great example. >> he is best bank ceo. and he was surly, what you guys are not listenin

bank more secure. we already know that barclays had to cough up $450 million in fines. ubs coughed up a whopping 1 1/2 million dollars. given that the u.k. taxpayers bailed out the royal bank of scotland in the crisis, needless to say they will be very angry about just who is going to foot the bill for this fine. >> there is not a of bonus money to pay for all of this there, so it will be coming from somewhere else, obviously. this is because the government has to pay a portion of its money back to the united states. but not the entire fine, some of it is for the british regulators. this fine. >> there is>> that announcemente u.s. regulators should be out in about 45 minutes. let's move on and talk about the competition in the u.k. media market. it is heating up. uk global has agreed to buy virgin media. the deal will create the world's largest broadband company, with 25 million customers in 14 different countries. the purchase, worth over $23 billion, will create the second- biggest tv service after bskyb, putting john malone in direct competition with this guy right here,

banks were victimized in this. kind of hard to explain. >> what about today's news? we've got $612 million settlement by rbs for libor manipulations. ubs, barclays also settled. more banks in the crosshairs. >> yes. >> is the game rigged? what's going on, sheila? >> well, i hope not. there have been some reforms in process for libor. some people think libor should be replaced with -- get rid of this judgmental survey and basis rate on actual transactions. at this point the regulators won't go that direction but clearly at lot more shoes to drop on this, and i think this is going to be years, a lot of private litigationing a well. i would say this is one of the cases where at least individuals -- there should be criminal actions brought against the individuals on the trading desk who were doing this. i believe a couple of actions have been brought against a couple of ubs traders. i would hope at least here they will be bringing criminal cases and sending people to jail. outrageous what was going on. >> in europe they are planning a big breakup of the banks partly because of a result of what happened in the 2008 financial crisis, and her

banks with massive fines. let's look back quickly at who had to pay and how much. " barclays was slapped with a $200 million -- $290 million fine. then there was an international scandal from ubsagreeing to pay regulators $1.5 billion. earlier on this month are bs was the bank majority owned by the british taxpayer, find $610 million. the boss of the u.s. commodity futures trading commission is currently in london, supervising at the moment. he told the bbc that he thought that rate rigging still occurs and that it needs to be replaced. >> about these three cases, pervasive rigging, we need to go to something that is far better for the public. they cannot be so easily manipulated. we have to really work with the market to move forward to a rate that is based on real transactions. unfortunately, this thing called libor with other sister rates, that is the challenge. how do we move on to something else, possibly moving to replace the rate? >> it might be hard to face sympathy for defense companies, but they are facing hard times. western governments have cut defense spending with their budgets. this feeds through two jobs as well. the u.k. systems have had to lay off over 3000 w

banking industry in switzerland. what's your pecking order? >> the pecking order, first we have the buy on ubs which is a clear turn around story. medium to long-term and they showed at least some progress the core results, they are on the right track. then we have with a clear view on private banking, we have this discerned ahead of the international wealth management of merrill lynch and this looks to be on track. both paired within increasing activity decline with the results. >> guys, again, from a snowy zurich. back over to you. and you may be able to see, our snowman has doubled in size. >> and he has eyes and a nose. >> yes. he's got eyes. he has one arm. not bad, is it? >> and what's that sticking out of his left shoulder? that's his arm. >> it almost looks like a lacrosse stick or something. >> anyway, well done. good job. >> and thanks to both rainer and carolin for braving the pelting zurich snow for us. it's really coming down. it's pretty, though. >>> mark carney is speaking before the treasury select committee. we've already seen that he says the bar to altering flexible inflatio

i don't think ubs is so spot on here. deutsche bank says it is fantastic news because of prefers this kind of shareholders rather than value destructive m&as. that's the line from deutsche bank here. it's a pretty positive one because, obviously, it benefits from this renewed share buyback program and analysts see a slightly positive impact on etf estimates. apart from that, l'oreal hiked its dividend by 15%. that's another positive. and the only fly in the ointment as you pointed out is the slowdown in luxury sales in the fourth quarter slowing to 6.2%. if you go back to the first quarter of 2010, we saw -- '12, rather, we saw rates around 12%. but this is not what investors seem to be worried about today. stock up by over 4%. back over to you. >> carolyn, thanks so much for that. michelin has raised its dividends. the world's second biggest carmaker posed to hold on for the year even as sales volumes remain flat. >> and in luxury news, airmiss has posted its own forecast. the maker of the iconic handbag says asia continues to be the

week, officials are nearing a settlement with the royal bank of scotland on an industrywide rate rigging scandal. traders at rbs, barclay's, ubsbanks engaged in systemic fraud when they intentionally manipulated libor or the london interbank offered rate to eliminate their own trading position. the rate is use to set the benchmark on hundreds of trillions of dollars of loans worldwide. in many cases, traders bumped up the rate to line their own pockets, meaning your mortgage payments may have been bumped up, as well. u.s. officials are seeking a guilty plea from rbs on criminal charges in addition to a fine of possibly $785 million. ubs has already been fined $1.5 billion. what should you know for the week to come? right now, there is an organized campaign from a who's who list of prominent powerful politicians to do everything in their power to stop the horrifying possibility of a college holding a panel discussion of a controversial issue. no, really. you should know a group of brooklyn college students organized an event to discuss the boycott sanctions movement, an attempt by active ifrts around the world to end its settle

ubs. the talk of selling shares as the u.k. bank confirms it's likely to face significant libor penalties. >>> a mighty surge for the nikkei in japan. the yen swooning on news that bank of japan's governor will make an early exit, opening door for more easing sooner. >>> u.s. indices yesterday had little trouble recovering the losses from monday's session. not necessarily the case in europe. if you look here today, we're actually looking in the green for the most part. not by much. the dow trying to add seven point at the open, 13,925 the level there. 14,000 clearly in the cross hairs. nasdaq a little bit less, we should say, less pointed for a rally. take fair value into account, it's looking to maybe shed a couple of points at the open. 1,506 the level for s&p 500. there's been a 1% for the s&p. the last time was november of 2011. we know markets had a weak period after that. we'll see if we can manage gains there. and then just how investors react. and now a quick look overnight, the ftse global 300 adding 0.0%. we'll hear more i

appeal escort has rejected a lawsuit against the swiss bank and called for a reimbursement of damages for ubs services that led the clients to evade u.s. taxes. carolin is in zurich in the warm today, carolin. what do we make of this? >> yes. well, if you think that this is a very twisted, unheard of story, i think you're probably not alone because the u.s. judge in this case called ate big travesty. he said it's odd for tax -- to seek recovery of damages. ross and kelly, let me give you the whole story. the lawsuit was filed by three former ubs clients in the u.s. they evaded taxes with the help of ubs. then they paid back their taxes plus a 20% fine when they took part in an irs amnesty a couple years ago. then they tried to recover some of those damages claiming that ubs failed to tell them that they actually needed to disclose those ubs accounts. by failing to do that, obviously, they committed tax evasion. but, again, the appeals court has thrown out that lawsuit and saying the plaintiff's case is like children who sue their parents to recover tax penalties because their parents failed t

investment bank unit is picking up advisory deals and you have to somehow steer this path from saying we're divorcing ourselves in the future. but recognize that is 50% of the profit and as ubs exits and this but you know, opportunity for barclay's is huge. >> and it's the investment bank with, not the wealth management side people liked more. barclay's is in a tough spot. >> we have this bizarre circumstance where the authorities, because of the early start of the crisis blew up in america, particularly blew up in securities but they thought it was a security-based crisis. our big problem is we have to separate these investment banks from these nice normal retail banks. if you're trying to count out the authorities, you look at if you're trying to split and down sooiz investment banking, but the reality is investment banking is where you can make quite good money and more importantly where you didn't lose. >> you resize the investment banking to look at the retail unit. >> put a hundred pence price on it or something, maybe it takes 15, 20 years to sell the whole thing off but at least there's a direct benefit. anything to these kinds of plans? >> if you did that, a lot of

ubs. we're going to be speaking about what the investment banks are doing in this space.o discuss here at the private equity forum. this is the largest, of course, across europe. the super return conference that we're attending today. >> yeah. karen, good stuff. plenty of great guests, as well, from there. thanks very much. >>> european stocks have ticked higher post the italian debt auction which we had, what, around 40 minutes or so ago. let's get more on how that's being received. claudia is in milan, claudia? >> reporter: we saw the yield at 4.83 on the ten year. higher, of course, than the 4.17% we saw in january. but better than what the market was predicting. and of course what it was afraid of which was the 5% level which was very important to not go above. also the bid to cover ratio was comfortsing, as well, 1.65. the same goes for the five year at 3.59% versus the january of 2.94 and a bid to cover there was 1.6 times. that their did calm the markets. we see an index here that's slightly in positive territory with the banks suffering. banks are actually doing q

ubs. they are basically -- and you can spin out their brokerage department which is not have the sort of connectivity that commercial of asman banking because there are lots of synergies, the land, you do stock and bond offerings for the same company. this is different. you could spend that out, and what they're doing is downsizing the investment bank. that is possible. this is harder. liz: always a game of monopoly, speaking of which, a huge name in the torah world, has broken making a big change. did you see the new monopoly pieces that are being rolled out? these are the ones, and then replace two others. they don't know which ones are going to go, but they are the ones that people really like. the diamond ring. i love that one. very cute, but i heard there are two other dakar's monopoly pieces of them revealed. >> reporter: pat kent. liz: you had this test. mr. moneybags. i like the car because it looks very. >> reporter: i am of fat cats. liz: i like the car because it is very, you know, 1940's, fancy >> reporter: i caused a stir on twitter. the name for tim geithner is new book, jen reported he will do a new book. he came out

executives and you actually think that what ubs has done is the better model in terms of using bonds. >> compensation is the big expense. many of then banks are not even earning their cost of capital yet in what's not a terrible environment. so, what you go for is compensation. it isn't just bigger than any other expense. for some of these, it's bigger than all the other expenses by some measure. the banks have been taking it down, firing people. that's really a tragedy. tens of thousands of people. and some how we seem to miss this and the tragedy there. they've been taking down compensation and they've been deferring out compensation. now, moving toward bond compensation is actually a very good way of reducing risk. equity compensation, which is what we've moved more towards actually encourages risk, in a way, we've been going in the wrong direction. >> do you think, then, that we need to break up the banks and reverse the demise of that in some way? >> well, i think it's all -- look, there's a lot of talk about breaking up banks. i know bob robin said today not break up then banks. for all these wonderful, esteemed very accomplished ge

ubs is trying to transfer from its investment banking to more of a wealth management model. margins in that business were weaker, weighing somewhat on investor prospects. but when it came to libor in particular, here is how the ceo responded to how they see their ability to put that issue behind them in 2013. >> i think that we made very good progress on addressing many of those issues during 2012. you are always going to have problems, but i think many of those problems will be more .more industrywide problems. >> yes. so saying they're basically sure it's an industry we're dealing with. but guess what? so is everyone. and that's certainly the case as the libor pros continue to widen. so a couple of ceo interviews to bring you there. wanted to play them out on air for us guys in case you didn't catch them in the wee hours of cnbc world. back your way. >> kelly, thank you. jim o'neill is the chairman of the goldman sachs asset management. jim, by the way, is on the advisory board for the cnbc delivering investor alpha conference. this year's gathering will be held on july 17

our next guest host for the next two hours is banking on america as source of growth, robert wolf, ceo of 32 advisors and former ceo of ubsant to talk about the business of your new entity, your new company and how it's going. now, you've got clients and you need to tell them what to do. >> i hear you. >> so where are we? what do we do? where's the economy? what's likely to happen and what about markets? >> let me give the 32nd 32 advisors. we are looking at gaps in this country, exports percent of gdp is 15% and all industrialized countries are north of 25 and 30% and germany at 50. we will help international trade finance. we brought on kevin barney who was at the export import bank. the second is inbound investment, very similar. before 2001, foreign voechlt into this country it was 30% of gdp for foreign investment. it is 15% because of investment, l labor -- >> when was it? >> before sep 11. now we hired barry jones, select usa don't select other companies, select us. we will help other countries come build, buy and invest. the third stream is austan goolsbee's economic intelligence stream where we think the economis