July 02, 2008	Wednesday	Jamadi-us-Sani 27, 1429

ZURICH, July 1: The biggest Swiss bank UBS, reeling from huge subprime losses, slashed its chairman’s powers and announced four boardroom changes on Tuesday as its shares plunged to a record low point.

The bank cut the chairman’s powers severely and four directors are to resign after months of drama over losses arising mainly from the subprime home-loan and securitisation crisis in the United States.

It announced a new management structure, with immediate effect, that will see the abolition of the chairman’s office but not the post itself. The chairman’s duties and responsibilities are being switched to board committees.

The chairman, Peter Kurer, appointed in April, said that “bringing UBS back to its leading position was the number one priority.

“We have made a big step forward with the clear separation of the duties between the board and executive management and the abolition of the chairman’s office,” he said.

The bank said in a statement that the “duties and responsibilities of the former chairman’s office are now allocated to a greater number of committees of the board, including new Risk and Strategy Committees.”

The bank has written down the value of assets by about $37 billion, rushed to raise extra capital to shore up its balance sheet and warned it might cut up to 5,000 jobs as it seeks to recover from its subprime losses.

It had already appointed Kurer to replace former chairman Marcel Ospel, criticised for holding too much power. The new structure appears to address this issue.

Some analysts think UBS may announce further big writedowns and the bank has also attracted the vigilance of the central bank and financial regulator over its capacity to withstand any more shocks because of its importance to the Swiss economy.

The bank said it would call an extraordinary general meeting on October 2 to elect new directors to replace the four who will resign in October.

UBS shares ended the day at an all-time low, falling 5.3 per cent to 20.30 Swiss francs, after having touched a low of 19.81. It closed as the second worst performer of the Swiss Market Index which was down 1.56 per cent.—AFP