According to the bank, its growth strategy for the investment banking area was not sufficiently planned and contributed to its poor performance.
The incentive scheme operated by the financial services provider did not take enough consideration of the risks involved in this strategy, the bank explained.
UBS decided against launching law suits against its directorial board due to the negative publicity such a trial creates as well as the slim chances of winning.
The bank said that a case would hurt its attempts to restore its image within financial markets,
Kaspar Villiger, chairman of the board of directors at UBS, said: "What happened should not have been allowed to happen. With our decision to refrain from legal proceedings, we do not want to gloss over the mistakes made by UBS or absolve those involved of their corporate responsibility.
âWe have learnt the lessons of the past and the new management is now placing UBS's focus on sustainable success.â
UBS reported write downs of $37 billion in spring 2008 following exposure to the subprime mortgage crisis.
By Jim Ottewill