UBS owns up to another $10bn

UBS caught most of the headlines this morning with their announcement that they are taking another $10bn write down on the credit book, on top of the $3bn last quarter.

This has got lots of people worried about what the other banks may still have hidden away. As is often the case, it is better to get all the bad news out of the way as fast as possible, otherwise you can destroy the trust that people have in your statements. Unfortunately, human nature conditions people to be cautious in giving bad news partly out of hope things may turn around and also because they are worried about the consequences of giving a large unexpected shock to the listener.

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