Banking giant UBS has appointed Swiss Re's group legal officer, Markus Diethelm, as its new general counsel.

Diethelm will take up the position during the third quarter of 2008, replacing former legal head Peter Kurer. The bank has been searching for Kurer's successor since April this year when he was controversially appointed as UBS chairman.

In the meantime, the role has been held temporarily by a three-person team comprising global head of compliance Neil Stocks, general counsel for the corporate centre Bernard Schmid and investment banking general counsel David Aufhauser.

Commenting on the move, Diethelm told Legal Week: "The role at UBS represents a great challenge for any general counsel and one has to take this opportunity when it comes.

"After 10 years in one place you build up a lot of human equity but it is just business.

"Swiss Re is a great company with many intelligent people and I will have a continuing emotional attachment to its team."

Diethelm's appointment comes at a difficult time for UBS. Earlier this month Aufhauser resigned amid New York attorney general Andrew Cuomo's investigation into its sale of auction-rate securities.

At the same time as announcing Diethelm's hire, the bank also announced a restructuring and significant losses.

The bank has so far been the biggest casualty of the credit crunch in Europe's banking sector.

Diethelm added: "With a very large team, such as the one at UBS, they will need to be comfortable with me as the new legal head and I want to show them what I can do.

"The first task on arriving at UBS will be to focus on its issues in the US. I do not underestimate the task at hand."

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