UBS kicked off an internal investigation into the catastrophic failure of its risk systems after rogue equity trades cost the Swiss bank $2.3bn (£1.4bn), raising the pressure on top management.UBS said its board of directors had set up a committee chaired by independent director David Sidwell, former chief financial officer at Morgan Stanley, to conduct an independent investigation into the trades and the bank\'s control systems. \"External expectations are that the investigation should take weeks and not months,\" a UBS insider said. \"The internal investigation will be coordinating with the regulators on their probe.\"The Swiss bank stunned markets on Thursday when it announced unauthorised trades had lost it about $2bn, a figure it increased to $2.3bn on Sunday. London trader Kweku Adoboli was charged on Friday with fraud and false accounting dating back to 2008. Chief executive Oswald Gruebel, who was brought out of retirement in 2009 to turn the bank around, said the alleged fraud would have consequences for strategy and possibly also for himself.UBS said the trader concealed \"unauthorised speculative trading in various S&P 500, DAX and EuroStoxx index futures over the last three months\" by creating fictitious hedging positions in internal systems. The UBS source said there was no indication that others were involved and the global synthetic equities team in which Adoboli worked was still operating, but added that members of the team would have to stop trading while answering questions as part of the investigation.The loss is a heavy blow to the reputation of Switzerland\'s biggest bank, which had just started to recover after its near collapse during the financial crisis and a damaging US investigation into its aiding wealthy Americans to dodge taxes. \"The UBS explanation about how the loss was incurred is similar to those speculated in the market on Friday but in the cold light of day remains just as shocking,\" said Peter Thorne, analyst at Helvea.By 0903 GMT UBS shares were down 1.4 percent at 10.1 francs, outperforming a 2.9 percent slide on the European banking stocks index. The new crisis has prompted calls for UBS\'s top managers to step down and for its investment bank to split into a separate unit from its core wealth management business. Swiss politicians will debate tough new financial regulations later on Monday and are expected to call for the bank to split off its investment unit to shield the core wealth management business from risk.UBS is now widely expected to speed up an overhaul that had initially been planned for announcement on November 17, although big shareholders have signalled that they could wait until that date while the bank completes its internal investigation, according to the inside source.Along with Gruebel, Carsten Kengeter, head of the investment banking unit, may be in the firing line.\"This begs a lot of questions with regard to management and reputation,\" said Kepler analyst Dirk Becker. \"We estimate that the investment banking chief Carsten Kengeter, who was appointed in April 2009 with a mission to build up a leading fixed income franchise and promoted in November 2010 to become solo divisional head, will be sacrificed after this scandal.\" UBS said it had covered the risk resulting from the unauthorised trades, and its equities business was again operating normally within previously defined risk limits. It said the trader had allegedly concealed the fact his trades violated UBS risk limits by executing fake exchange-traded funds (ETFs) positions. ETFs are index funds listed on an exchange and can be traded just like regular stocks. They try to replicate index performances and offer lower costs than actively managed funds, but regulators have warned about risks from some complex ETFs.