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Stock market: Out of the frying pan...

Imagine being the chief executive of Fiat this week. There you are, gloomily looking at the Fiat share price, back below €15.

Suddenly your thoughts are interrupted by a knock on the door. It’s the postman with a letter from a man called Luqman Arnold, the largest activist shareholder in UBS – until recently one of the world’s top 10 banks.

The letter is addressed not in your capacity as boss of Fiat, but it addresses you as vice- chairman of UBS.

You have just been through the most almighty five-year wrestling match with Fiat as chief executive and managed to get it into a shape that has won adulation.

Along the way, you managed to pick up a couple of tasty little non-executive jobs – one of them being a non-executive director of UBS, a nice little number.

You open the letter tentatively, knowing that the news is not going to be good: “UBS’s reputation has been comprehensively destroyed by proprietary trading activities totally divorced from any client business,” it reads. The man knows his subject. Luqman Arnold was chief executive of UBS before being sacked in 2001.

UBS has just fired top management again. In the last couple of months it has had two massive write-downs, identifying £18.5 billion in bad investments.

Those losses are the largest trading losses in European banking history as Arnold reminds you. Only the crises at Bear Stearns and Northern Rock have been bigger news in the banking sector.

You reach the point in the letter that you have been dreading. He wants all the old board out, including the chairman and, as the senior independent director of UBS, he wants you to take control.

Just imagine it. From the biggest basket case in the European motor industry to the biggest banking losses in European history in a single bound. It’s completely the reverse of what you had hoped for. What are you going to do?

You lift the tail of your trademark blue sweater, remove a pack of 20 from the pocket of your chinos, light a cigarette and breathe deeply..... (to be continued).

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