(Repeats to overwrite previous update)
* Regulator names ex-UBS executive Mark Branson to top post
* Branson's past at UBS has stirred debate among lawmakers
* Branson given all-clear by FINMA in 2012 over Libor
* Forex rigging, U.S. tax probe among issues for regulator
* FINMA, c.bank to review too-big-to-fail laws next year
(Adds Swiss government comment, writes through)
By Katharina Bart
ZURICH, March 26 The Swiss government named
British-born former banker Mark Branson on Wednesday as the
first non-Swiss national to head its financial regulator, just
as the body probes currency markets and prepares for a major
review of big banks.
Branson, 45, had worked at the regulator since 2010 and
became deputy chief last year. He previously held a senior post
at a division of UBS AG involved in the rigging of
interest rates, for which the bank, among others in the
industry, has paid huge fines.
"Because of his experience, and to ensure continuity, Mark
Branson had been the top candidate from the outset", among
internal and outside candidates evaluated as early as last year,
FINMA said in a statement which confirmed what two sources
familiar with the matter had told Reuters on Tuesday.
Branson was in charge of UBS's Japan unit between 2006 and
early 2008, when the bank has been found to be involved in
rigging the London Interbank Offered Rate (Libor), a benchmark
used to price trillions of dollars of financial products.
FINMA gave Branson, who was excused by the regulator from
all UBS Libor matters in mid-2012, the all-clear over the fraud,
on the basis that Libor traders at UBS answered to investment
banking leadership in London, not to Branson, who was never
accused of any wrongdoing. Branson himself has not commented.
In December 2012, UBS agreed to pay roughly $1.5 billion to
settle with U.S., UK and Swiss regulators over the Libor
scandal. UBS's Japan unit pleaded guilty to criminal fraud.
Some former and current colleagues denied Branson's past
would impede his role as head of FINMA.
"Mark Branson has a proven integrity and a professional
objectivity ... He can be very close to someone but it doesn't
compromise his objectivity, and he does it elegantly," Luqman
Arnold, a former CEO of UBS, said.
But criticism may resurface when Branson has to deal with
future misconduct cases.
"There cannot be anything which questions the credibility of
FINMA in any way. Branson's UBS past is a problem," Christophe
Darbellay, president of Switzerland's Christian Democratic
People's Party, which is part of the seven-party Swiss
government, said before Tuesday's announcement.
FINMA, along with regulators in the United States, Britain
and Asia, is probing possible manipulation of the $5.3
trillion-a-day foreign exchange market and Britain's financial
watchdog has said allegations about currency markets are as
serious as those concerning Libor.
Branson joined FINMA in 2010 to oversee Switzerland's
banking sector and was named deputy chief executive last year.
He has been acting CEO since January when Patrick Raaflaub
announced his surprise departure.
His promotion marks a continuation of Switzerland's tougher,
hands-on approach to banking regulation forged in the aftermath
of the 2008-09 global financial crisis.
Taxpayers had to prop up UBS with a 6 billion franc bailout
after the bank's disastrous bets on the U.S. mortgage market,
since when Swiss authorities have imposed some of the toughest
capital requirements in the world on UBS and rival Credit Suisse
Branson, a maths and management graduate from Cambridge
University, defused any suspicions of favouritism towards UBS
last year when he blindsided his old employer with an order to
stockpile 28 billion francs in extra capital.
That sum was later lowered to 22.5 billion but still hit the
bank's returns targets.
FINMA and the Swiss National Bank (SNB) begin a review next
year of laws on banks regarded as being "too big to fail". This
is being closely watched by investors, because of political
calls in Switzerland for a tougher line on institutions that
think their scale allows them to expect state bailouts.
An extensive U.S. probe into Swiss banks' role in helping
wealthy U.S. citizens evade tax has also fundamentally altered
the relationship between the regulator and the banks.
Bankers in Zurich, Geneva and Basel have complained that the
regulator had "gone rogue" on them, after it urged banks to come
clean about their role in offshore tax evasion and to take
provisions for resultant penalties, or risk more costly
prosecution by U.S. authorities.
Industry lobby group the Swiss Banking Association said it
"expects the new CEO to establish again a spirit of trust and
cooperation between the banking industry and the regulator".
Branson should be versed in dealing with crises. In 2001, as
head of communications for UBS, he orchestrated its defence of
its role in the bankruptcy of national carrier Swissair, which
sparked widespread political and popular outrage.
In 2008, he became the public face of UBS in the United
States, apologising in a dramatic hearing on Capitol Hill for
the Swiss bank's role in helping Americans evade taxes.
People who have worked with Branson, who is fluent in French
and German, say he is principled and a stickler for details. At
UBS he insisted on proofing statements meant for investors
word-for-word, marking each line with a tick.
($1 = 0.8862 Swiss Francs)
(Additional reporting by Oliver Hirt; Editing by Anthony Barker
and David Holmes)