UBS is about to find out if the scandal over comments by star economist Paul Donovan has died down. The British commentator and author is being reinstated at the Swiss bank following a more than three-month break.
Paul Donovan, the chief economist of UBS' private bank, is being reinstated in his job after more than three months on suspension, a spokesman for the Swiss bank confirmed to finews.com. The 26-year veteran of UBS' return, first reported by the «Financial Times» (behind paywall) on Tuesday, follows a maelstrom in China over a perceived ethnic slur.
UBS risks a renewed backlash from potential Chinese clients by reinstating him. Donovan appears to have Martin Blessing, former co-head of the wealth management arm, to thank for his job back: Blessing left UBS on Tuesday, and ex-Credit Suisse star Iqbal Khan replaced him on Wednesday.
Cultural Awareness Classes
The Swiss bank launched a training program to alert bankers of cultural sensitivities, according to the pink paper. UBS' investigation also concluded that the long service of Donovan, who quickly apologized for his remarks, outweighed the faux-pas, the «FT» said. His return comes against the backdrop of 70th-anniversary celebrations for Communist Party-ruled China.
Whether this is enough to avert anger over Donovan's reinstatement remains to be seen. A government-backed firm in China shut UBS out of a bond deal, the Chinese Securities Association demanded Donovan be sacked, and a Chinese brokerage stopped dealing with the bank.
