Two months after a massive backlash in China, UBS' former top economist Paul Donovan is still AWOL. The Swiss bank hasn't sat out the tricky «swinegate» affair yet.
Paul Donovan was put on enforced holiday after a maelstrom in China over a perceived ethic slur in June. The Swiss wealth management giant has little to nothing to say about Donovan, a 26-year British veteran of UBS who had been the wealth arm's public face as its chief economist.
A spokesman pointed to CEO Sergio Ermotti's comments three weeks ago, saying the bank would discuss Donovan and his role at the right time. The situation remains fraught, two months after the original incident, which saw Donovan apologize – but not fast enough for UBS to lose a key Chinese deal.
Fashion Snafu
The recent scandal surrounding Versace illustrates the tightrope that western companies walk when courting Chinese business: the Italian fashion house apologized and bowed to consumer backlash in China over the labeling of a t-shirt with Macau and Hong Kong implying the territories are independent (they are not).
The fashion snafu underscores UBS' conundrum with Donovan, an eloquent commentator of financial markets. If the Swiss bank reinstates him in the same job, it risks a renewed backlash from potential Chinese clients.
Public Conundrum
If UBS dispatches of Donovan, it will be seen as toeing the Chinese line – not a strong, confident look either in China nor in the west. UBS' most promising option is that Donovan elects to leave «voluntarily» – and quietly.
He is still listed as UBS' chief economist for wealthy clients, and his countless media appearances are still readily available on its website. Donovan is unlikely to return to the public type of role he formerly exercised at UBS; his «leave» is likely to last until he has formally left the wealth manager.
