2016 | OriginalPaper | Chapter
Aspirational Pitfalls at UBS and Merrill Lynch
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When it comes to the global financial crisis, the devil lies in the details. This chapter reviews the histories of two investment banks, UBS and Merrill Lynch, identifying the psychological issues that drove the decisions they made which promoted financial fragility and subsequent economic instability.1 Both banks participated actively in the market for CDOs constructed with mortgage-backed securities. Both banks practiced risk management poorly, and both banks incurred large losses as a result. What happened within these organizations that permitted this magnitude of errors?