Oswald Gruebel was something of an industry hero when he turned around vaunted Swiss bank Credit Suisse, which nearly went belly up in 2008 because of more than $50 billion in losses on various toxic assets.

When he was brought out of retirement to similarly turn around UBS, the industry cheered. But no one could have expected that his demise would be ushered in by a mid-level trader on the Delta One desk, who somehow gamed the system to place a string of rogue trades that cascaded into a $2.3 billion loss.

Gruebel has now paid the price. He has announced he will step down as head of the bank. The board graciously accepted his decisions as the right thing to do and quickly settled on UBS executive Sergio Ermotti as the interim CEO while it looks at other candidates. The problem is that the board itself is undergoing something of a transition. Former Bundesbank head Axel Weber, who is scheduled to take over as UBS chairman in 2013, has already been involved in the CEO transition process. The crisis may hasten his arrival. What he'll find is a bank that was already reeling from the global financial upheaval, one whose future is a big question mark right now. More cuts are likely, especially in investment banking, where UBS has been hit hardest.

As for Gruebel, he apparently will not be receiving severance pay, and his transition will be long--about 6 months. What's sad is that he had been making progress at the bank, which had returned to profitability, though the challenges facing the bank were immense.

For more:
- here's a Reuters article on Ermotti

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