In the great Orwellian tradition of Newspeak, a Swiss bank has introduced its own vocabulary: UBSpeak. The purpose of this new linguistic form is to effect brutal personnel changes, while continuing to praise everyone involved.

In May, the venerable Swiss bank shut down Dillon Read Capital Management at a cost of $300 million without a bad word to say about anyone - including John Costas, the investment banker who had led UBS into the costly misadventure. UBS preferred to suggest that it had lost its appetite for financial risk than denounce Mr Costas and his management team. In fact, Mr Costas had been given a consultancy position to ease him out of the door as quickly and quietly as possible. UBS’ most senior executives had grown fed up with the arrogant, expensive and uncooperative team assembled by Mr Costas, who they felt had overpromised and underdelivered.

Then, in the middle of the night on Thursday, UBS announced another wrenching change, accompanied by another altogether improbable explanation. The UBS board said it had ousted Peter Wuffli, the chief executive, directly contrary to the wishes of Marcel Ospel, the UBS chairman who is the most formidable single figure in Swiss, and arguably European, banking.

Mr Wuffli, it was explained, had done a superb job, but would relinquish all his functions at the bank immediately. Of course, this kind of Panglossian press release is pretty standard practice when corporate bosses are fired: companies like to execute their chief executives with as little humiliation, disruption and risk of litigation as possible.

BACKGROUND

• Boardroom mutiny as a chairman is snubbed

• Wuffli goes as boardroom rift opens up at UBS

• UBS topples Goldman in half-time deals table

• Ospel nearly quits after protege not promoted

• Another top UBS banker quits

Silent UBS assassination augurs HSBC tie-up

On Thursday UBS announced another wrenching change, accompanied by another altogether improbable explanation

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At the end of last week, UBS said yesterday, the board came to Mr Ospel and said that it had decided that Mr Wuffli should not succeed him and, instead, they would like him to continue as chairman for at least another three years. Mr Ospel says that he soon found himself the only man around the boardroom table backing Mr Wuffli, while the 12 other directors were pressing for the chief executive to go and for the chairman to stay.

Really? Is that really what happened? Is it really conceivable that Mr Ospel was sprung with the decision that the board was vetoing his chosen successor just last week? Is it possible that Mr Ospel and his fellow directors could have spent a year, during which succession was uppermost in the minds of the UBS board, without discussing Mr Wuffli’s prospects? Does it make any sense that the board of UBS would want to retain a chairman, whose judgment about the management of the company was so diametrically opposed to theirs? And is it anything but laughable that UBS now claims to be delivering ‘generational change’ by swapping a 49 year-old chief executive for a 42 year-old one?

No mention was made of the failure at Dillon Read. There was no reference to the loss of senior US bankers. There was no discussion of shareholder pressure for a break-up of the investment banking and asset management businesses. (Mr Ospel made clear yesterday there will be no break-up, there will be no sale of the investment banking arm to the likes of Lehmans.)

The theory that was circulating in the City last night was that Mr Ospel, 57, had reasserted his authority over UBS, but had sought to do so in such a way as to demonstrate his enduring personal loyalty towards Mr Wuffli. After the personality clash and boardroom coup that led to Mr Arnold’s departure from UBS in 2001, neither the board nor Mr Ospel wanted to be seen to be engineering the exit of another chief executive.

Mr Ospel denies all this. He insists that the executive changes at UBS happened as explained in the official press release. He wanted Wuffli; the board did not; he played the humble corporate servant, who was willing to accept their judgment over his own.

Unfortunately, UBS’ unwillingness yesterday to address the linkages between problems in the business and changes to the executive structure mean that it is hard to know whether the corporate conspiracy theorists or the bank’s official propagandists are telling the truth. And all this obscures the extraordinary success of its investment banking business in Asia, its slow but impressive growth in M&A advisory work in the US as well as the premier service it provides managing the assets of the world’s wealthiest people.

The Utopian Bank of Switzerland has an impressive story to tell back in the real world. Perhaps, it would make its case better if combined with a bank which knows how to operate globally, which needs investment banking and asset management businesses to complement its retail and corporate services and which, judging from the recent subprime debacle, knows how to handle bad news as well as good: HSBC.

In the late 1990s, a prominent Swiss investor approached Sir John Bond about combining HSBC with UBS, partly because he wanted truly international management. There are many obstacles to such a merger, not least scepticism about size and the understandable reservations about whether such a banking behemoth would be manageable. But the changes at the top of UBS in the early hours of yesterday morning -and the way they were handled - are bound to make bankers revisit the idea of a new HSBC: the Hong Kong Switzerland Banking Corporation.

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