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Formerly the most powerful financial institution in Europe, UBS was under intense pressure again on Tuesday - traders rattled by this story in the FT and by news that Merrill Lynch has removed the bank from its “Europe 1″ recommended investment list.

Some have been predicting a profits warning from UBS as it enters the third quarter. Instead, what we have got is a boardroom clearout, with the surprise resignation of four of the bank’s longest serving directors.

Stephan Haeringer, Rolf Meyer, Peter Spuhler and Lawrence Weinbach will now step down at a special shareholders’ meeting on October 2. Their replacements have yet to be named.

Partially addressing its activist tormentors, UBS has also bestowed the title of Senior Independent Director (a Cadbury-esque rank) on Sergio Marchionne, who remains vice chairman.

And there’s a new corporate governance “model” that promises to clarify the separation of responsibilities between the board and the bank’s executive management.

The Board of Directors will have a clear strategy setting responsibility, and it will supervise and monitor the business. The CEO and the Group Executive Board will be fully responsible for the executive management of the bank. The duties and responsibilities of the former Chairman’s office are now allocated to a greater number of committees of the Board, including new Risk and Strategy Committees. The remits of the Governance and Nominating Committee and the Human Resources and Compensation Committee have been expanded.

From Rule 1.1, concerning the “Role Profile and Expectations of Board Members”:

Board Members as a group must have the necessary qualifications and skills to perform all Board duties and must together possess financial literacy, experience in banking and risk management, international experience, including experience of international financial matters, and knowledge of the duties of directors.

The reaction? In terms of analysis from rival banks, the immediate reaction was one of caution bordering on the sceptical. An illustrative par from Folkert Jan Van Der Veer at Dresdner Kleinwort:

We reiterate our cautious investment recommendation on UBS as near term challenges are significant. The threat of legal action in the US could put management in a delicate and undesired position whereby it may have to hand over client information in order to avoid legal repercussions. It is too early to judge whether the announced changes in Corporate Governance is a positive driver for credit spreads. UBS 7.152% Tier 1, callable in 2017, is opening this morning at z+404/384bps.

Related links:
Corporate governance and organisation regulations at UBS
UBS departures clear way for board shake-up - FT.com
UBS faces legal move on tax evaders - FT