Margareta Pagano: Pity UBS. But it could just as easily be RBS

Governments must look again at a full break-up of the banks

There's the most toe-curling moment in the new film of Andrew Sorkin's magnificent bestseller Too Big to Fail when Hank Paulson, then US Treasury Secretary, is asked by his aides how on earth the regulators didn't spot that banks like Lehman Brothers were building up billions and billions in toxic debt.

Without so much as a blink, Paulson shrugs his shoulders and says: "Because everyone was making so much money." Watching the film on Thursday evening, just hours after the news broke that a young trader at UBS had racked up losses of £1.3bn and on the anniversary of that Lehman weekend, you could see how little has really changed since Paulson explained the greed of financiers and their masters the world over.

Yes, there have been endless debates about the banking industry, endless rules and regulations, resolution processes in place to halt the "too big to fail", as well as attempts at making it harder for bankers to earn all of their bonuses in cash.

But what none of the regulators or governments has yet addressed adequately is the cultural and ethical mores that guide the big investment banks such as UBS and which make it possible for young traders, like Kweku Adoboli, to lose the equivalent of about half a year of UBS's profits in a couple of weeks.

As Paulson might have said, so long as Adoboli and his fellow traders on UBS's giant trading floor are encouraged to make as much money as possible – their bonuses depend on it – then you will have crises like this. Indeed, you could say the entire philosophy behind UBS's investment banking team – aggressively to rebuild the business that nearly collapsed after the 2008 financial crash – is built on roguery.

That's why it's up to UBS's top managers and risk controllers to explain why they didn't spot Adoboli's big gambles in exchange-traded funds. And those who should be shouting the loudest are the bank's shareholders – who you could argue are as much to blame since they are still turning a blind eye to the fact that the bank, like all the banks on Wall Street and in the City, are still being driven by huge bonuses. If governments don't legislate against bonuses, then it's got to be down to shareholders and pension funds to stop the "too big to fail" bonuses. The reason they haven't until now is because they've been in the money.

It's not without irony that UBS was one of the biggest victims of the last crash – it lost £35bn in the US sub-prime mortgage securities crisis and had to be rescued by investors and the Swiss government. What the Swiss politicians do now, though, will be fascinating to watch. Its parliament was due to vote in three weeks' time on new rules to limit risk-taking by the country's two biggest banks – UBS and Credit Suisse. Both were burnt badly so it's no surprise that politicians have been pushing hard for tougher new banking rules than their peers in the US and Europe to avert another collapse.

The Swiss had their own investigation – like our Independent Banking Commission – but it also rejected calls for full separation of the retail and investment banking divisions. Maybe not for much longer. Now Swiss politicians are lobbying again for full break-up which is bound to intensify as the crisis around UBS deepens. UBS may not survive in its current form, as the Zurich board is already looking at pulling out of London.

Where does that leave the UK's latest banking reforms? Supporters of the IBC's proposals are arguing that George Osborne must push ahead with plans for ring-fencing and higher capital ratios, and bring them forward, ahead of the 2019 timetable.

The UBS loss should prompt the IBC and Osborne to look again at a full break-up; it's still the superior option. For there's a problem with ring-fencing; rings are there to be run around and fences to be jumped. Full separation wouldn't prevent traders going awol, say at a bank like RBS. But if its investment bank were to be properly spun off, I have no doubt that directors would think far more carefully about how to reward people and of their own personal liability.

As Sorkin's film also showed, so long as you have people like John Mack "the Knife" of Morgan Stanley in charge of investment banking, you're going to have a culture of excess and excesses. It was Mack – who interestingly stepped down last week from Morgan Stanley – whose rallying cry to staff to get more business was: "There's blood in the water, let's go kill."

Urgh! Someone pass the sick bag – Ms May's stance on equal pay is revolting

You may have noticed a little item in the news last week about a new invention on the market – the "Sick Bag for Life". It's the brainwave of flight-comparison website Jetcost.co.uk, and comes in two parts; a jute outer layer and an inner biodegradable one to be thrown away after sickly flying.

Jetcost should send me one to try out after hearing that Theresa May – who doubles as minister for Women and Equalities – is dropping the obligation for firms to publish the pay of women workers. May also confirmed that quotas won't be enforced in the boardroom. Instead, she has come up with a jolly wheeze called Think, Act, Report. With the snappily acronymed TAR, companies can look at their own pay levels, decide whether they are discriminatory and then act, or not.

May is right that the last thing any business wants right now is more regulation, but she's wrong to claim that forcing firms to compare pay takes much time or effort. How long does it take a chief executive or his bean-counters to check a payroll and work out the differences in pay? (About 10 per cent for full-time work.)

But what irritated me most about May's excuse – far worse than any of Harperson's solecisms – was this: she worries that enforcing such laws would "frighten the horses". But the softly-softly approach over the past few decades has had very little impact, and it's only now – with the threat of EU quotas next year – that most businessmen are taking positive steps towards promoting women at every level of the corporate ladder.

Her decision is all the more disappointing as it came only days after a leaked memo from No 10 revealed how the coalition is desperately seeking new ways to entice back women voters. The memo, said to be from David Cameron's blue-sky thinker, the usually bright Steve Hilton, raised all sorts of potty ideas; from cutting short summer holidays to inviting women in business to a knees-up at Downing Street.

But this time he's missed the elephant in the room; that's not what women want. Just ask them – when they've finished throwing up.

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