Swiss Appoint British-Born Branson to Run Finance Watchdog

(Updates with Branson’s comments in seventh paragraph.)

March 26 (Bloomberg) — Mark Branson, a British-born former UBS AG executive, was named chief executive officer of Switzerland’s financial regulator, the first foreigner to assume the role in at least four decades.

Branson, who has led banking supervision at the watchdog since 2010, was appointed after becoming acting CEO on Feb. 1, Finma said in a statement from Bern today. He will take up the post on April 1 and replaces Patrick Raaflaub, who stepped down after five years in the job.

Branson, 45, is taking leadership at the Financial Market Supervisory Authority as the regulator investigates potential manipulation of currency markets and Swiss banks grapple with a U.S. crackdown on tax evasion. Some politicians had opposed hiring him on grounds of nationality and his 12-year career at UBS, which was fined $1.5 billion for rigging interest rates in December 2012.

As chief regulator for more than 300 Swiss banks, Branson forced firms such as UBS and Credit Suisse Group AG, Switzerland’s second-biggest lender, to meet tougher capital requirements, urging them in 2011 to meet the new standards “the faster the better.” Finma, as the regulator is known, also pushed for stricter policing of sales of financial products to consumers. The Swiss regulators are due to review the requirements for too-big-to-fail banks in 2015.

‘Top Candidate’

“The Finma board of directors has full confidence in Mark Branson’s expertise, competence, integrity and broad experience at the national and international levels,” Anne Heritier Lachat, the board chair, said in the statement. The board was unanimous in its decision and has considered Branson “the top candidate” from the outset, according to the statement. The Swiss government approved the appointment today.

Lawmakers of the Swiss People’s Party, which operates on an anti-immigration platform, were among those who objected to appointing Branson to the position. The Social Democratic Party, Switzerland’s second-biggest political grouping, in 2009 opposed his appointment to the banking supervisor saying a career at UBS threatened to compromise his independence.

Branson said at a press conference in Bern today that he plans to apply for Swiss citizenship at the end of the year, when he’s eligible to do so. He also said that he had no connection to the foreign exchange business while at UBS. Michael Schoch will replace Branson as head of heading banking supervision on an interim basis.

Finma also said that Yann Wermeille, head of the markets division, will leave the regulator to take up a management position at a new company in the financial industry. He will ensure a smooth handover until the end of April, it said. The board appointed Leonard Bole and Michael Loretan to replace Wermeille as the markets division will be split to create a new asset-management division.

New Division

“It’s a global trend to expand supervisory bodies,” Andreas Venditti, a Zurich-based banking analyst at Vontobel, said of changes to Finma’s organization. “Switzerland appears to be following U.S. and British examples in this regard.”

The new division will include licensing and supervision of asset managers and collective investment schemes and will be headed by Loretan, once a successor has been found for his current role as the head of supervision for Credit Suisse. Loretan, 48, joined Finma in 2011 and previously held various management positions in the financial industry.

Bole, 40, who has worked for the regulator since 2004 and has led anti-money-laundering supervision since 2009, will become head of the markets division on April 1 and act as interim head of the asset management division. The markets division will now focus on the supervision of financial market infrastructure, combating money laundering, self-regulatory organizations, directly subordinated financial intermediaries and audit firms, Finma said.

UBS Posts

“Finma was set up in a difficult environment and is now well established,” Branson said in the statement. “I look forward to tackling the upcoming challenges with the Finma staff and my colleagues on the executive board. I will make every effort to ensure that Finma continues to fulfill its duties.”

Branson worked for UBS, Switzerland’s biggest bank, from 1997 until 2009 and held posts including head of investor relations, corporate communications, CEO of UBS Securities Japan Ltd. and chief financial officer for its wealth management and Swiss banking division.

He studied mathematics and management studies at Trinity College Cambridge and got a master’s degree in operational research from the University of Lancaster, England.

Rate Rigging

Branson had to abstain from decisions on UBS for a year after joining Finma, the regulator said in an e-mailed statement this month. After Finma started investigating UBS for interest- rate rigging, Branson was recused to avoid any appearance of partiality, it said.

Finma said in 2012 that it found no indication UBS’s top management knew about alleged rate-rigging by its traders. Finma ordered the bank to disgorge 59 million francs ($66.6 million) of profits. The amount was part of a total $1.5 billion that UBS was ordered to pay by regulators in Switzerland, the U.S., and the U.K.

UBS Securities Japan pleaded guilty to one count of wire fraud in the U.S. as part of the settlement. Two former UBS traders have been charged by U.S. prosecutors in connection with the alleged manipulation of yen Libor.

To contact the reporters on this story: Jeffrey Vögeli in Zurich at [e-mail]; Elena Logutenkova in Zurich at [e-mail] To contact the editors responsible for this story: Frank Connelly at [e-mail] Cindy Roberts