UBS has said that Sergio Ermotti will be the caretaker chief executive of the bank following the resignation of Oswald Gruebel last week.

The UBS board on Saturday accepted the resignation of 67-year-old Oswald Gruebel who had taken the blame for the scandal involving $2.3 billion rogue trading. This incident became a major setback for CEO Oswald Gruebel, who was attempting to revive the investment banking division after it recorded $65 billion in cumulative pretax losses in three years. In February 2009, the bank made Oswald Grübel, the former head of rival Credit Suisse, its CEO for reviving the financial firm.

Ermotti, who worked at Merrill Lynch & Co. for 18 years, joined UBS from UniCredit SpA in April. He has experience both in investment banking and wealth management.

The interim CEO will be having a tough task in his hands which will involve winning back the confidence of the clients and also face the loss due to the rogue trading incident. His highest priorities are speeding up the overhaul of the investment bank, along with reviewing risk controls and overseeing an investigation into the huge trading loss, which he said should conclude in the next two weeks. Reducing risk at the investment bank won’t necessarily hurt earnings, Ermotti told reporters.

“I’m fully aware of the magnitude and the complexity of the task ahead,” Ermotti said on the call with reporters. “I’m counting on my colleagues on the executive board to support me in this challenge.”

Kweku Adoboli, 31, the UBS trader charged with fraud and false accounting that may have resulted in the loss, remains in custody after a hearing in London on Sept. 22.

Last month, UBS announced a $2.3 billion cost-cutting plan and axed 3,500 jobs. This was in preparation of joining rival investment banks in reversing the post-crisis hiring binge.

Shares in UBS, which staged a relief rally late last week were up 4.3 percent at 10.6 francs by 0927 GM

Ermotti, 51, who hails from Switzerland's Italian-speaking region of Ticino, has been regarded as a likely candidate for further promotion since he joined UBS in April as head of Europe, Middle East and Africa. A graduate from the Oxford University, he also sits on the board of Hotel Residence Principe Leopoldo SA.