Board member of Swiss regulator steps down owing to BES link

ZURICH, July 10 Thu Jul 10, 2014 12:18pm EDT

ZURICH, July 10 (Reuters) - A veteran board member of Swiss financial regulator FINMA is unexpectedly stepping down from his role at the end of August due to his role at Banque Privee Espirito Santo SA (BPES), part of the troubled Portuguese Espirito Santo group of companies.

Zufferey is a board member at Pully, Switzerland-based Banque Privee Espirito Santo SA (BPES), which said on Wednesday that some clients had not been reimbursed on debt issued by Espirito Santo International (ESI), a holding company connected to BES..

"Mr. Zufferey decided to leave FINMA's board after problems in the Espirito Santo group emerged," the regulator told Reuters in a statement.

"With this step, Mr. Zufferey wants to prevent any discussion about there being any bias at FINMA towards the Swiss unit of Espirito Santo."

On Thursday, Portugal's markets sank and its borrowing costs soared as fears grew that financial difficulties at the Espirito Santo group of companies could have far-reaching implications.

Zufferey, a professor of law in Fribourg, has been with FINMA for 13 years and had already decided not to stand for reelection when his current term expires next year, the regulator said.

FINMA, which still has the required minimum of board members after Zufferey's departure, said the Swiss government will decide whether to replace him.

Zufferey wasn't available for comment through FINMA or the University of Fribourg, where he teaches. (Reporting By Katharina Bart; Editing by Laura Noonan and Sophie Walker)