Swiss bank's chief resigns over £1.5bn rogue-trader scandal

The chief executive of UBS, the Swiss bank at the centre of the alleged $2.3bn (£1.48bn) rogue-trader scandal in London, has resigned just days after he dismissed calls for his head.

The resignation of Oswald Gruebel was announced yesterday morning following a board meeting in Singapore on Friday. Chairman Kasper Villiger insisted the board had tried to persuade him to stay on until at least next year, but said that Mr Gruebel's "uncompromising principles and integrity" meant that he felt he must take responsibility for the losses.

Sergio Ermotti, 51, UBS's head of Europe, Middle East and Africa, has taken over as interim chief executive, and will be a candidate for the permanent position.

The bank was stunned earlier this month when losses of more than $2bn were discovered. A 31-year-old trader, Kweku Adoboli, faces criminal charges of fraud and false accounting and, if he is found guilty, up to 10 years in prison.

Mr Adoboli's immediate boss, John Hughes, resigned shortly after the losses came to light.

Mr Ermotti said the bank's investigation into the losses will be completed within 10 to 14 days. "We need to... make sure all the hard work is not thrown away by a single incident like this one," he added.

The City was shocked that such huge losses could still be accumulated despite the major banks introducing stricter prevention measures in the wake of the financial crisis and other rogue-trader scandals.

However, UBS is one of the best-capitalised banks, having more money than most on its balance sheet to absorb any financial shocks.