* FINMA head Raaflaub cites personal reasons for exit
* Former UBS exec Branson takes over as temporary head
* Talks over U.S. probe into Swiss banks and evasion ongoing
(Adds comments, details, background)
By Katharina Bart
ZURICH, Jan 15 The head of Switzerland's
financial regulator will step down at the end of this month in a
surprise move as the watchdog helps Swiss banks to work with
U.S. officials in a crackdown on wealthy Americans evading
Although Chief Executive Officer Patrick Raaflaub's five
year stint at regulator FINMA was controversial, his sudden
departure at one of the tensest times in recent history for
Swiss banks surprised bankers in Zurich and officials in Bern.
FINMA gave little reason for the departure of the
48-year-old Raaflaub, beyond saying he had chosen to leave and
that it regretted his decision. A FINMA spokesman cited personal
reasons for the exit, without elaborating.
Deputy CEO Mark Branson, a British-born former UBS
banker, will act as CEO from February until further notice.
Switzerland's finance ministry said it too regretted Raaflaub's
exit, and that it was searching for a replacement.
"The timing is most unfortunate," said Peter V. Kunz,
professor of business law at Berne University, adding there were
still major issues to be tackled in Swiss financial services.
Raaflaub's departure coincides with FINMA's efforts to help
extract Swiss banks from the prolonged and painful crackdown by
U.S. authorities into tax evasion through hidden offshore
Only seven weeks ago Raaflaub had caused a stir by urging
the banks to face up to penalties or risk more costly
The timing of Raaflaub's departure was also problematic
because it comes before global banking regulators have hammered
out a new rule meant to rein in risky balance sheets from 2018,
In his five years at FINMA, Raaflaub won plaudits for
unifying the oversight of Swiss banks and insurers, but he also
became a lightning rod for criticism.
Swiss bank executives regularly complained that FINMA,
chastened by the near-collapse of UBS in 2008 and a subsequent
government rescue, had become far too tough as a result.
Raaflaub's tenure was also marked by territorial conflicts
behind the scenes with the Swiss National Bank over regulation.
Switzerland forces its lenders to go beyond the global
standards brought in to avoid a repeat of the 2008 financial
crisis, a gold-plated approach bankers have dubbed the "Swiss
Stricter rules on the leverage ratio may be looming for the
two largest Swiss banks, UBS and Credit Suisse, and
FINMA recently imposed an extra capital requirement on UBS in
case it has to pay out more than expected in legal settlements.
Raaflaub's departure comes several days after a Swiss
newspaper reported that FINMA chairwoman Anne Heritier-Lachat
planned to retire before her term ends in 2015. On Wednesday, a
FINMA spokesman denied she planned to do so.
Branson led UBS in Japan at a time when the Swiss bank's
traders there were manipulating benchmark interest rates, for
which it was fined $1.5 billion by regulators in 2012. Branson
was later cleared by the Swiss regulator.
"It is now time for me to take on a new challenge," Raaflaub
said in a statement, without elaborating. Raaflaub began his
career at Credit Suisse and spent 14 years at reinsurer Swiss Re
before moving to FINMA.
Through a FINMA spokesman, Raaflaub declined to comment.
(Additional reporting by Alice Baghdjian; Editing by David
Goodman and Matthias Williams)