Swiss bank UBS is threatening to move its headquarters out of Switzerland if the authorities impose too many new regulations in the wake of the global financial crisis, Swiss weekly paper Sonntag CH said.

Oswald Gruebel, chief executive of Switzerland's biggest bank by assets, made the threat in a speech to businessmen last week, citing the possibility that the authorities would force major banks to reorganize as holding companies, the paper said on Sunday.

A UBS spokeswoman declined to comment on the report.

Gruebel spoke to the Zurich Business Club on Thursday at a closed-door event at which reporters were not present.

The idea of forcing banks in Switzerland to operate as holding companies is part of the discussion on supervising banks deemed too big to fail.

Switzerland's relatively small economy is dominated by two mega-banks, UBS and Credit Suisse .

Swiss National Bank Vice-Chairman Philipp Hildebrand, noting total banking assets are more than seven times the size of Swiss gross domestic product, said earlier this month that the country urgently needed tougher regulatory standards than other countries given the relative size of its banks. [ID:nLI129832]

The Swiss government bailed out UBS in October 2008 by injecting 6 billion Swiss francs ($5.95 billion) in return for a stake of some 9 percent, subsequently sold at a profit.

UBS also originally planned to transfer some $60 billion in illiquid assets to the central bank, but this was later reduced to $39 billion.

Swiss regulators believe that forcing multinational banks to operate as national institutions in different countries, controlled by a central holding company, would allow the authorities in a crisis to rescue the Swiss company while letting foreign subsidies go under, the paper said.

But such a structure would oblige the bank to inject capital into the subsidiaries, which would be expensive.

In such circumstances it would be logical to move the holding company abroad, the paper quoted Gruebel as saying.

Gruebel is not the only banker to threaten a move.

Bankers and hedge funds in London often say they will move to Switzerland if UK regulation and taxation becomes too oppressive.

($1=1.009 Swiss Franc)

(Reporting by Jonathan Lynn; Editing by Mike Nesbit)

Investment Privacy Credit Suisse