UBS's CEO criticises the Swiss bank's public perception

ZURICH (Reuters) - UBS's CEO lamented the perception that the lender is too big for Switzerland and pushed back against the need for tougher regulation at an event held at the University of Zurich on Wednesday.

"To be honest, it's quite surprising how quickly UBS went from being perceived as a saviour to a potential future problem for the country," Sergio Ermotti said.

UBS, which rescued former rival Credit Suisse last year, faces growing regulatory and political scrutiny as Switzerland seeks ways to protect itself should a bank with a balance sheet double the size of its economy ever fail.

The Swiss government recently unveiled plans to raise capital requirements for banks deemed "too big to fail", fuelling concerns about whether they would impact the ability of UBS to reward shareholders.

"We need to avoid making strategic mistakes today that prove costly in the future," Ermotti said.

Many of UBS's positive contributions, such as sponsorship deals and the taxes paid by its employees, he said, are often absent from the public debate.

He said some people take for granted that Switzerland's financial centre will always be strong and others argue the country doesn't need to be a major player in global finance.

"I find that troubling, to put it mildly," he said.

UBS's CEO also said the public had a right to know what led to Credit Suisse's downfall.

"It's especially confusing, if not extraordinary, to see many of the people who were in charge over the years saying they did everything correctly in relation to the management and supervision of Credit Suisse," said Ermotti.

UBS faces a pivotal year in the integration of Credit Suisse, with trickier stages such as combining IT systems, migrating clients from Credit Suisse and cutting the enlarged banks' workforce of 111,549 all still to come.

(Reporting by Noele Illien; Editing by Mark Potter)