As you may recall, about 2 months ago the GIC (Government of Singapore Investment Corp) invested $10 billion into Swiss bank UBS. It looks like a very bad investment now.
Switzerland's biggest bank UBS unveiled another round of writedowns to the tune of 19 billion dollars! This is on top of the 18.4 billion they writedown last year. In total, UBS has lost more than 37 billion dollars due to the US subprime mortgage crisis. Over 37 billion!
UBS has tried to limit the damage by saying that it's current chairman, Marcel Ospel, would step down this year but I doubt that will help much. Afterall, the writedowns at UBS are far greater than those of American banks Citigroup and Merrill Lynch, which made UBS the biggest losers since the sub-prime crisis. The rescue by GIC (with an unnamed investor in the Middle East) was always risky, but now it seems that it a bad bet.
And to think, they turned down an offer of a seat on the board of UBS on top of this! What did Singapore actually gain from this risky investment? Nothing. What will Singapore gain from this risky investment in the future? Hopefully some oversight in the future.
Hey, a man can dream.