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October 26, 2011 2:17 pm
Axel Weber, the former Bundesbank president, will be able to join beleaguered Swiss banking group UBS earlier than expected – but only in a limited role.
The Bundesbank said Mr Weber, who had been tipped as a future head of the European Central Bank, would be able to work for UBS as an “adviser” from next February.
Mr Weber was in July nominated for election as a UBS board member at next year’s shareholders’ meeting, in what was seen as a coup for the Swiss group. UBS added at the time that Mr Weber would move up to become chairman from 2013, again after the appropriate shareholders’ meeting.
The timing of Mr Weber’s arrival has gained importance following recent problems at UBS. The range of challenges facing the bank has thrown a harsh spotlight on succession planning and strategy, prompting demands from analysts and some Swiss politicians for UBS to accelerate Mr Weber’s arrival and succession.
The group must find a new chief executive after the surprise departure last month of Oswald Grübel. Although Sergio Ermotti has been named as interim successor, UBS has launched an international search for a permanent head, and it has been widely argued that Mr Weber, as future chairman, should be directly involved.
UBS’s need to devise a long-term strategy for its ailing investment bank has amplified calls for Mr Weber’s accelerated arrival. Under Swiss law, strategic planning is the responsibility of the board of directors. The bank’s current chairman, Kaspar Villiger, is a former Swiss politician drafted into the job in March 2009 during an earlier UBS crisis. While respected for his integrity, Mr Villiger is not a banker nor seen as a strategist.
Mr Weber’s arrival in February may go some way to allaying such concerns, but the Bundesbank’s approval for him to play a role at UBS has been hedged with constraints.
The German central bank said Mr Weber would only be able to act as an “adviser”, and limited even that activity to helping to determine personnel matters, “related to the future composition of the leading echelon of UBS.”
The restrictions are part of fixed Bundesbank rules governing what former top executives can do once they leave the central bank to prevent conflicts of interest or damage to the bank’s reputation.
UBS said it welcomed the news and would “between now and February work out the details of Mr Weber’s mandate.”
In spite of his earlier-than-expected arrival, the timing suggests Mr Weber may still not be involved directly in choosing a permanent chief executive or in the new investment banking strategy – the two crucial issues facing UBS.
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