Swiss bank UBS is planning to separate its investment bank and incorporate it outside of Switzerland to placate regulators, it was reported today.

UBS is considering incorporating its investment bank, which lost billions during the financial crisis and was rescued by the Swiss central bank, in London, New York or Singapore, where it would have its own capital and be overseen by local regulators, the Wall Street Journal said.

UBS could not be immediately contacted for comment.

Last month, UBS called for a year's delay to stringent Swiss capital rules to allow more clarity on international regulation, while striking a more conciliatory note by vowing to keep its base in Switzerland.

Chairman Kaspar Villiger told the bank's annual shareholders' meeting that UBS was not threatening to relocate abroad and was aware of the advantages of being based in Switzerland, but wanted to highlight the risks of tightening rules.

In April, the Swiss government pushed ahead with plans to make UBS and Credit Suisse reach tough new capital standards, saying the benefit to the economy outweighed costs to the banks.

UBS chief executive Oswald Gruebel has said the stiff Swiss standards could force UBS to move units abroad.

Reuters