Swiss bank UBS today named former Bundesbank president Axel Weber as its next chairman in a surprise move that robbed rival Deutsche Bank of a top candidate to succeed its chief Josef Ackermann in 2013.
Mr Weber shocked the European financial establishment by announcing in February he would quit his role as Bundesbank chief, leaving Berlin without a candidate to succeed Jean-Claude Trichet as president of the European Central Bank - an institution Mr Weber felt was straying too far from its inflation-fighting mandate.
He is likely to take a more prominent role at UBS than current chairman Kaspar Villiger, a former Swiss finance minister who was coaxed out of retirement to help restore market confidence in the bank after it suffered the worst annual loss in Swiss corporate history during the financial crisis.
UBS's smooth succession planning contrasts with the difficulties seen at its German rival Deutsche where Mr Ackermann, chairman of the executive board, extended his contract for four years in 2009 after the bank failed to find a successor.
The UBS move is a coup for the Swiss bank and for Mr Weber - a man who has never been afraid to ruffle feathers.
As Bundesbank chief, he clashed with Nicolas Sarkozy when the French president leaned on the ECB to cut interest rates.
He also infuriated the German government by pulling out of the ECB presidency race without consulting chancellor Angela Merkel - a decision rooted in his opposition to the central bank buying bonds and straying from its inflation-fighting role.
UBS said Mr Weber, who will be the first non-Swiss to head the bank, would get a basic salary of 1.5 million Swiss francs as vice-chairman, as well as 150,000 UBS shares, which will be restricted from sale for four years.
UBS' offer was too attractive for the German to turn down, a source familiar with the matter said, adding Deutsche Bank had not made the former Bundesbank chief an offer.
Mr Weber, who was in Zurich today, will move to Switzerland when he takes up the post at UBS, the source said. He has been working at the University of Chicago on a one-year teaching post since leaving the the Bundesbank in April.
UBS, Europe's largest wealth manager by assets, said it would nominate MrWeber to the board at the annual general meeting in May 2012, and that he was expected to take over from 70-year-old Mr Villiger in 2013.
Swiss National Bank chairman Philipp Hildebrand welcomed Weber's nomination as a "pleasing development for the bank and for Switzerland as a whole", adding:
"For UBS, the nomination has brought clarity to one of the main long-term management issues, and this can also be assessed very favourably with regard to the outlook for the bank."
UBS has lost a series of high-profile bankers to rivals this year across various regions after a bonus round which disappointed many.
Mr Weber's appointment may help to stem that tide.
Mr Weber (54) was president of Germany's central bank, the Bundesbank, from April 2004 to April 2011 and was a member of the Governing Council of the ECB.
The Bundesbank said it would discuss Weber's request for permission to take the UBS board seat at its July 12th meeting - a process seen as a formality.
Reuters