When the dust settles following the unauthorised trading loss that has cost UBS $2bn, two things should be obvious. First, that the bank’s risk management and control systems need refinement. Second, that if it is in over its head in proprietary trading, it should not be doing it, whatever the pressure to generate a return on its ample capital base.

In the short term, the Swiss bank should use its scheduled strategy review in November to overhaul management (again) and consider exiting areas where its chances of cutting it as a tier one operator are remote, such as fixed income, commodities and currencies. Despite the apparent source of the loss, UBS should stick to its top-notch core equities business, and to advisory.

UBS shareholders, meanwhile, may ponder whether the bank’s foray into investment banking has been worth it at all. The bank cannot maintain the pretence that its “integrated” strategy has benefited investors. Cumulative pre-tax numbers for the past seven years show that the investment bank lost SFr40bn, while non-investment banking areas (wealth and asset management and domestic banking) made SFr50bn. Or consider that UBS has returned 30 per cent less than the FTSE Eurofirst 300 banks index over the same period, and more than 70 per cent less than the Swiss market.

What is more, the investment banking outlook is hazy and the hefty extra capital requirements of Swiss regulators mean that UBS will have to run harder to make returns. Two-thirds of capital is tied up in the investment bank, JPMorgan Cazenove notes, and two-thirds of that in its fixed income, commodities and currencies business. Wealth management needs far less capital. The antecedents of UBS illustrate the mix of businesses from which it has been hewn. UBS’s performance suggests that it has been in vain. It is time to unscramble the omelette.

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