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 "On the whole, the financial markets are also still far from normal, although the evidence suggests that we are gradually re-approaching normality," Ospel told shareholders at their annual meeting confronted with how to recover from US$37.4 billion (euro23.65 billion) in write-downs since last summer.
Under Ospel, UBS has been among banks hardest-hit by the subprime mortgage crisis in the United States.
"The subprime crisis put our shares under pressure," he said. "It tainted our reputation as a dynamic, innovative yet always risk-conscious financial institution. And it also put our clients' trust to a severe test."
Ospel said that he felt it was his duty as captain of the ship to ride out the storm.
"Despite the fact that I am now leaving the helm, I do so with the conviction that we have weathered the worst, that the storm is gradually passing, and that we will soon be sailing into calmer waters."
UBS Chief Executive Marcel Rohner said the bank has started to reduce its risks but would retain its investment bank, blamed for most of the bad investments in U.S. subprime securities.
"The first thing we have started to do is reduce our risk," Rohner said. "Today our problem positions are only about a third of what they were at the end of September 2007," Rohner said.
He said UBS' large global wealth management business will be the backbone of its activities, but that the investment bank was still needed.
"Many wealthy clients want the products and services of the investment bank. For its part, the investment bank conducts transactions for wealth management and is a key provider of structured products," he said.
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 Rohner said an overall loss of 4 billion Swiss francs for 2007 "speaks for itself."
"It is a disastrous result, and it has eroded a great deal of trust," he told shareholders, adding that the bank will "ensure that something like this never happens again."
Referring to the 50-page report published by the bank on its Web site Monday, Rohner said it "reveals in painfully clear detail what happened and where both we and our systems failed."
"It does not make for pleasant reading, but it does reflect reality," he said.
Rohner told shareholders that one of the biggest mistakes was the failure of oversight.
UBS "could not see the forest for the trees," he said.
Peter Kurer, designated as successor to Ospel, noted that some shareholder groups had criticized the selection of him as chairman.
"I have been asked to take on this role by the board, and I have accepted the challenge out of my sense of responsibility for the bank, its shareholders, clients, staff and the communities we work in," Kurer said.
"We will have to work hard to restore our reputation and regain the confidence of our clients, our investors, our staff and our regulators."
Kurer said fundamental change is needed in the way UBS looks at risk.
He proposed setting up a risk committee that would systematically review the bank's portfolios.
[Associated Press; By ERNST E. ABEGG]
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