The chief executive of Switzerland's biggest bank is stepping down after a trading scandal cost the financial institution $2.3 billion.

UBS announced Oswald Gruebel's resignation Saturday. Bank Chairman of the Board of Directors Kaspar Villiger said in a statement that the bank had wanted Gruebel to stay on but that the chief executive felt he had to accept responsibility for the unauthorized financial transactions.

A London-based UBS trader, Kweku Adoboli, is being held in a British jail after being arrested last week in connection with the scandal. He is charged with fraud and false accounting.

UBS brought Gruebel out of retirement to revive the Zurich-based bank's fortunes after it suffered major losses on investments in home loans that went bad. UBS also credits Gruebel with securing enough funds to meet stringent, new requirements put in place following the financial crisis.

The bank's biggest shareholder, the Government of Singapore Investment Corporation, publicly criticized UBS. The sovereign wealth fund urged bank officials to act quickly in order to restore confidence following the trading scandal.

The bank said UBS Europe chief Sergio Ermotti will take over as interim chief executive until a permanent replacement is appointed.