It proved a case of too many cooks spoiling the broth at UBS for the bank's chairman, Marcel Ospel, who waved goodbye to executive board president Luqman Arnold last Sunday. Arnold was replaced by Peter Wuffli.

It is alleged that UBS, Switzerland's biggest and Europe's third-biggest bank, sacked the highly regarded Arnold after a power struggle with Ospel. The line between Arnold and Ospel's roles was always vaguely defined and had become more blurred, with neither man willing to give way.

It is believed that Arnold, an Indian-born British citizen and the first non-Swiss president of the group's executive board, sought a leadership role greater than his colleagues were willing to grant him. He is credited with making the bank's finances more transparent and keeping down costs.

Since the announcement of Wuffli's appointment, UBS investors wiped 6.9 billion Swiss francs (£3.7 billion), 6.3 per cent, from the bank's market value. Observers at the bank said Ospel has now reasserted his dominance at the bank, since 44-year-old Wuffli is thought more likely than Arnold to accept a junior role.

According to Urs von Arx, who helps manage more than 1 billion Swiss francs at Pictet & Cie in Zurich, including UBS and Credit Suisse Group, "I doubt that Mr Wuffli has the same personality strengths as Mr Arnold."

Wuffli has been a colleague of Ospel since 1994, overseeing part of the company's fund management unit. That business suffered 118 billion Swiss francs (£63 billion) of net customer withdrawals in 1999 and 2000.

Wuffli has a doctorate in business management from Switzerland's University of St Gall and served as a captain in the Swiss army. He also worked at McKinsey and Co in Switzerland as a consultant from 1984 to 1993. His father was chief executive officer of Credit Suisse from 1967 to 1977.

He started at Swiss Bank in 1994 as chief financial officer. Ospel joined the bank in 1987 as head of the securities trading and sales business.

Wuffli said: "I've been working with Marcel Ospel for close to nine years and we are an extremely well established team."

Christian Stark, an analyst at Credit Agricole Indosuez Chevreux, who lowered his rating on UBS to 'buy' from 'strong buy' after Arnold's departure, said: "Wuffli was chosen because he can be kept under control much better."

Wuffli said he would approach the job in a co-operative spirit. "I think large groups are managed by teams of people," he said. "We're not managed by single stars."

The bank has not had a ceo since last April, which analysts said may have contributed to the clash between Arnold and Ospel, the latter described by Wuffli as "an active chairman".

Swiss Bank Corp bought Union Bank of Switzerland in 1998 to form UBS. Wuffli was chosen by Ospel to reverse a slide at the company's institutional fund business, which includes Brinson Partners in Chicago and Phillips & Drew in London.

Clients reportedly defected because funds managed by Brinson and Phillips &Drew limited their investments in high-flying computer and phone-related stocks. Since many of those stocks peaked in March 2000, investors have been more agreeable to UBS's `value' style of investing, which involved buying stakes in companies whose shares are inexpensive relative to earnings.