The rogue trade disaster at UBS will put pressure on the Swiss bank to accelerate plans to install a successor to Chief Executive Oswald Gruebel with a mission to dramatically slash the investment bank and renew the focus on wealth management.

UBS has been grooming Sergio Ermotti, the former deputy chief executive of UniCredit who joined the bank as Europe, Middle East and Africa chief in April, but until the scandal Gruebel had signaled that he was in no hurry to go.

Gruebel said on Sunday that the buck stops with me and he would bear the consequences of the shock $2.3 billion trading loss that was discovered last week, adding the news would influence the future strategy of the investment bank

A UBS insider said bearing the consequences did not necessarily imply Greubel would leave immediately, but he might be thinking of forgoing his annual bonus again, speeding up restructuring or making other senior management changes.

Gruebel, a gruff 67-year-old German who previously ran Credit Suisse , was brought out of retirement in 2009 to help clean up UBS after huge losses on subprime assets forced the Swiss government to bail out the bank.

He initially indicated he would only stay in the job for a couple of years to get the bank back on its feet but suggested recently that he could stick around at least until former Bundesbank boss Axel Weber takes over as chairman in 2013.

As part of his strategy to restore the former glory of the investment bank, Gruebel -- himself a former bond trader -- promoted Carsten Kengeter to lead the business.

The 44-year-old former co-head of Goldman Sachs' Asia securities division was initially seen as possible CEO material, but his star was already fading before the discovery last week of the huge unauthorized trades in his business.

We estimate that the investment banking chief Carsten Kengeter ... will be sacrificed after this scandal, said Kepler analyst Dirk Becker.

He was the fourth head of the investment bank since the crisis and this fluctuation at the top is clearly harmful.

But that is unlikely to be enough. Pressure will mount on Gruebel, especially if an internal investigation launched on Sunday reveals systematic risk control failures.

ARROGANT, IRRESPONSIBLE?

It doesn't seem so certain after the weekend that he will stay. If the internal controls show severe failings then he will probably have to go, said one Zurich trader.

UBS Honorary Chairman Nikolaus Senn said he did not believe Gruebel would be able to resist the pressure to step down: I do not know how often Gruebel flew to London to ask the people in charge how the business was going, Senn said.

The Social Democrats, Switzerland's second-biggest party which wants to ban big banks from engaging in risky investment banking, has called for his head.

Arrogant and irresponsible managers like Oswald Gruebel must finally be replaced by people who have learnt the lessons of the 2008 financial crisis, the party said in a statement.

Even Christoph Blocher, a leading figure in the right-wing Swiss People's Party, said UBS should look for a replacement.

If UBS has somebody better then he should resign. But it's not that easy as Gruebel is called upon every time when something goes wrong, he told Der Sonntag newspaper.

Helvea analyst Peter Thorne said Ermotti was definitely the frontrunner as UBS lacked few credible alternative candidates.

We're hoping for great things from Ermotti to resize the business, he said. He's got the background, he's a senior financial figure, Swiss and not tainted by the past problems of

UBS.

The 51-year-old from the Italian-speaking Ticino region of Switzerland trumps possible alternative candidates Lukas Gaehwiler, CEO of UBS Switzerland, and Juerg Zeltner, CEO of Wealth Management, in terms of broad international experience.

Ermotti worked at Merrill Lynch for nearly 18 years, lastly as head of global equity markets, before joining UniCredit in 2005, rising to deputy CEO with responsibility for corporate and investment banking as well as private banking.

At UBS for only five months, Ermotti has met key clients, taken charge of UBS's relationship with regulators in Europe and driven the bank's strategy of making sure its investment bankers and private client advisers work closely together.

While few outsiders are likely to be tempted by a move to the crisis-stricken bank, Hugo Baenziger, chief risk officer at Deutsche Bank , has been touted as one possibility, given his Swiss nationality and experience working at Credit Suisse and the Swiss regulator.

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For TAKE A LOOK-UBS loses $2.3 bln in rogue trades, please

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(Editing by Hans-Juergen Peters)