ZURICH - BIG Swiss banks must introduce a new salary system as the basic idea of paying bonuses became 'partially perverted", Finance Minister Hans-Rudolf Merz said in an interview published on Saturday.

UBS AG and Credit Suisse Group AG have to accept that the government will intervene on questions of salaries and bonuses, he told the Neue Zuercher Zeitung.

'Things happened here that are not acceptable. The basic idea of the bonus has been partially perverted,' said Mr Merz, who has recently returned to his post after a heart attack in late Sept.

UBS, Switzerland's biggest bank and one of the worst hit lenders in the financial crisis, is facing domestic criticism over executive pay after risky US investments nearly brought it to its knees and prompted the government to step in.

Local media are in particular targeting former UBS Chairman Marcel Ospel, who was forced to quit earlier this year but has nonetheless received millions of Swiss francs in bonuses.

'Where bonuses are clearly unfair on the grounds of mismanagement, then the banks have to take action,' Mr Merz said.

'The appropriate persons are urged to undertake repayments.

'Secondly, UBS has to define a new salary system. The corner stones of that must be plausible enough so that they can be understood by everyone.' -- THOMSON REUTERS