UBS exec Branson joins Swiss bank watchdog FINMA

* Mark Branson to head FINMA's banks division

* Move may reignite debate about conflicts of interest

By Sven Egenter

ZURICH, Oct 27 (Reuters) - Senior UBS AG (UBSN.VX)(UBS.N) executive Mark Branson will head Swiss regulator FINMA's banking unit, the Swiss watchdog said on Tuesday, in a move likely to reignite debate over close ties between regulators and large banks.

The 40-year old Briton took over the role of chief financial officer at the troubled Swiss bank's wealth management unit in February 2008 and FINMA said he would start in his new position and join its executive board on Jan. 1, 2010.

He will not take decisions affecting UBS for a year, during which time decisions on his former employer will be taken by FINMA Chief Executive Patrick Raaflaub.

Branson moved into the spotlight earlier this year when he testified and apologised for the bank's breaches of U.S. law in a Senate hearing during a bitter tax row with U.S. authorities. [ID:nN04200806]

His appointment will likely stir a debate over potential conflicts of interest caused by ties between the regulatory body and the banking industry. The chairman of FINMA's board of director, Eugen Haltiner, also joined from UBS in 2006.