ZURICH (Reuters) - UBS shares tumbled for a second day in a row on Tuesday, closing down 17 percent, although they recovered slightly after the bank said the cost of closing its exposure to Lehman Brothers would not exceed $300 million (168 million pounds).

UBS chief executive Marcel Rohner said in a TV interview that the bank was prepared to weather the current market turmoil.

"We are glad that we have taken the painful measures early -- the capital increase, the strong risk reduction," UBS CEO Marcel Rohner told Swiss TV channel SF1. "So we are now prepared to deal with this very difficult situation."

UBS AG shares fell to their lowest since listing in their current form in 1998, as soaring interbank loan rates exacerbated the worries of investors about the sector's prospects after the collapse of U.S. investment bank Lehman Brothers.

Rohner said in a second interview with SF1, the events in the United States would show up in the bank's results.

"It will certainly have an impact, but it's hard to tell how strongly. Volatility is very high," Rohner said.

The bank was better prepared to deal with the crisis than pure investment banks thanks to its broader business model, Rohner said.

"What we have seen now is a worsening of the crisis, which nobody could have expected. But we are nevertheless convinced that we are able to deal with it," Rohner said.

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