A 31-year-old man was arrested in London today in connection with allegations of £1.3bn-worth of rogue trading at Swiss banking giant UBS.
The man has been named as Kweku Adoboli and he was arrested this afternoon on suspicion of fraud by abuse of position and remains in police custody.
The bank, which has 6,000 staff in the UK, revealed earlier that a trader had lost $2bn (€1.5bn) on unauthorised trades and warned that the activity could have tipped the bank to a third-quarter loss.
UBS's London offices are based in Finsbury Avenue, in the heart of the City.
The Zurich-based firm, which employs 65,000 staff worldwide, would not comment further on the arrest.
UBS has been hit by global growth fears and last month said it would reduce its headcount by 3,500 as part of a bid to save 2bn Swiss francs (€1.7bn) by the end of 2013.
In a short statement today, the bank said: "UBS has discovered a loss due to unauthorised trading by a trader in its investment bank.
"The matter is still being investigated, but UBS's current estimate of the loss on the trades is in the range of two billion US dollars.
"It is possible that this could lead UBS to report a loss for the third quarter of 2011. No client positions were affected."
Shares in the bank were down by more than 7pc today.