ZURICH - Senior UBS AG executive Mark Branson will head Swiss regulator FINMA's banking unit, the Swiss watchdog said on Tuesday, in a move likely to reignite debate over close ties between regulators and large banks.
The 40-year old Briton took over the role of chief financial officer at the troubled Swiss bank's wealth management unit in February 2008 and FINMA said he would start in his new position and join its executive board on Jan. 1, 2010.
He will not take decisions affecting UBS for a year, during which time decisions on his former employer will be taken by FINMA Chief Executive Patrick Raaflaub.
Branson moved into the spotlight earlier this year when he testified and apologised for the bank's breaches of U.S. law in a Senate hearing during a bitter tax row with U.S. authorities.
His appointment will likely stir a debate over potential conflicts of interest caused by ties between the regulatory body and the banking industry. The chairman of FINMA's board of director, Eugen Haltiner, also joined from UBS in 2006.
Regulators have argued they need qualified and experienced staff in order to keep up with developments in the industry and to properly fulfil their supervision mandate.
FINMA spokesman Alain Bichsel said Branson's appointment was key to strengthen the authorities' competence in the areas of finance and risk. Such experts will always have a background, Bichsel said. But therefore we have a code of conduct with clear rules.
Branson joined UBS in 1997, having previously worked for its main domestic rival Credit Suisse Group AG.
The Swiss government bailed out UBS in October last year as the bank ran up over $50 billion in writedowns and posted the largest corporate loss in the country's history. (Additional reporting by Rupert Pretterklieber; Editing by David Holmes)