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[UBS LOGO]                                     UBS AG
                                               Postfach
                                               CH-8098 Zurich
                                               Tel. +41-44-234 11 11

                                               Group Accounting Policies

                                               Will Widdowson
                                               Stockerstrasse 64
Via EDGAR and messenger                        Tel. +41-1-234 55 65
                                               Fax  +41-1-234 20 44
Ms Joyce Sweeney                               will.widdowson@ubs.com
Senior Accountant
Division of Corporation Finance                www.ubs.com
United States Securities and Exchange
Commission
Mail Stop 4561
450 Fifth Street, N.W.
Washington, D.C. 20549

20 October 2006

UBS AG
FORM 20-F FOR THE YEAR ENDED DECEMBER 31, 2005
FILED MARCH 21, 2006
FILE NUMBER 001-15060

Dear Ms Sweeney

We respectfully submit the responses set forth below to the comment letter dated
September 21, 2006 (the "Comment Letter") from the staff (the "Staff") of the
Securities and Exchange Commission (the "Commission") relating to the Annual
Report on Form 20-F for the fiscal year ended December 31, 2005 (the "2005 Form
20-F") of UBS AG (the "Company"). For your convenience, we have set out the text
of each comment contained in the Comment Letter, followed by our response. As
you requested, we have included supplemental information where applicable and
will make every effort to comply with your comments in the Company's future
filings.

COMMENT 1
UBS financial highlights, page 2
--------------------------------
We note the Form 20-F available to investors on your website includes the
following financial measures that exclude goodwill amortization: earnings per
share, return on equity, net profit and cost/income ratio. Your Form 20-F filed
with the Commission does not include these measures. In your March 25, 2004
correspondence to the Staff you agreed to omit these measures from future
filings. Please revise the Form 20-F available on your website to conform
exactly to your Form 20-F as filed with the Commission.

RESPONSE
We note that in discussions with your Staff it was subsequently acknowledged
that the Form 20-F on our website is not different from the Form 20-F as filed
with the Commission. However, we wish to advise you that one of the documents
included in the filing did inadvertently contain certain pre-goodwill numbers
(see page 2 of the Handbook 2005/2006), although we do not cross-reference that
information in our responses to the financial data items required by Form 20-F.
Our cross references in the wrap-around document in our Form 20-F refer only to
the Financial Report 2005, which does not
<PAGE>
                                                  UBS AG
                                                  Form 20-F for the Year Ended
                                                  December 31, 2005
                                                  Filed March 21, 2006
                                                  File Number 001-15060
                                                  20 October 2006
                                                  Page 2 of 10

contain pre-goodwill numbers. We will recheck future filings to avoid including
such information, whether in the cross-referenced text or in the other text
included in the filed documents.

COMMENT 2
Results, page 20
----------------
In future filings please disclose the total amount or percentage of trading
revenues recognized attributable to proprietary trading on your own behalf for
each period presented. Please provide us with your proposed future disclosure.

RESPONSE
While we note your request that our future filings include the total amount or
percentage of trading revenues attributable to proprietary trading we
respectfully suggest that a narrative explanation within the Management
Discussion and Analysis part of our Financial Reporting is the most appropriate
way of explaining the significance of proprietary trading results. Our belief is
based on the following:

   1. We are not aware of any explicit requirement for the disclosure of
      proprietary trading revenues in either relevant accounting standards or
      the SEC regulations applicable to the Company. While we acknowledge the
      general requirement to provide sufficient information to enable users to
      properly understand the Company's financial position we do not see any
      explicit requirement for numerical data and would read the regulations as
      permitting narrative explanation.

   2. We are not aware of a consistent, generally accepted definition of
      "proprietary trading revenues". Indeed, we believe it would be difficult
      to achieve consensus on such a consistent definition. For example, a
      market making trading book in which an investment bank risk manages
      transactions arising in the normal course of providing liquidity to
      securities markets will record trading revenues, interest/dividend income
      and interest expense. Part of these may be attributable to the risks borne
      by the book, which might be regarded as proprietary in nature. Another
      part may be attributable to the margin made on customer flow business.
      Because such trading activities are risk managed on an integrated basis it
      is difficult to define the proprietary component and attribute
      revenues/costs to that component. Our internal reporting follows from the
      way in which this business is managed; combined figures for trading
      revenues are reported to senior management.

   3. In the absence of a consistent industry wide definition of proprietary
      trading we have some difficulty with seeing how numerical disclosure would
      provide more useful information than a narrative description of
      significant developments in the proprietary trading area. We also have
      reservations about the disclosure of numerical data which may not be
      comparable with any potential future numerical disclosure made by our
      peers in the financial services industry by reason of differing
      definitions of proprietary trading.

   4. We are not aware that other registrants in our peer group are disclosing a
      total amount or percentage of trading income derived from proprietary
      trading activities in their external financial reports. Some make
      qualitative comments in similar ways as we do in our MD&A or in analyst
      presentations. In the past, our practice was to include a comment on
      proprietary trading in periods where revenues from proprietary trading
      activities were one of the drivers of the result when compared with prior
      periods. Such comments on proprietary trading were not based on a
      comprehensive analysis of our proprietary trading revenues, but rather on
      the results of certain risk positions that may have performed well above
      or below average in a given period.

For the above reasons, we respectfully ask you to consider favorably our
proposal to continue to provide narrative explanation of significant profit/loss
developments in relation to risks which might be considered to be of a
proprietary nature.
<PAGE>

                                                  UBS AG
                                                  Form 20-F for the Year Ended
                                                  December 31, 2005
                                                  Filed March 21, 2006
                                                  File Number 001-15060
                                                  20 October 2006
                                                  Page 3 of 10

COMMENT 3
Industrial Holdings, page 56
----------------------------
We note your disclosure of the performance indicator titled "Investment" and the
footnote description of the components used to arrive at the measure. Based on
the disclosure included in this section of your document it is not clear how the
relative significance of the components (historical cost of investments made,
less divestments and impairments) impacts the performance indicator or how a
reader should interpret this information. In future filings please quantify the
components of this performance indicator for the periods presented and include a
narrative discussion of how the company uses this information as an indicator of
performance for your Industrial Holdings segment. Please provide us with your
proposed future disclosure.

RESPONSE
In future filings, we will include information on "Unrecognized gains". We
believe this provides a better measure of performance for this business. We will
keep the disclosure on the size of our investment, because its development shows
the progress we make in winding down our private equity portfolio, which is our
declared strategy for this business. In addition, in our 2006 Annual Report, we
will remove any key performance indicators for the Industrial Holdings segment,
because that segment is no longer material to the Company. The disclosure that
we plan to make with respect to private equity investments is therefore
considered complementary information and will look as follows:

   PRIVATE EQUITY
   CHF billion                      31.12.06         31.12.05         31.12.04
   Investments, at cost                  X.X              0.7              1.2
   Portfolio fair value                  X.X              1.0              1.7
   Unrecognized gains                    X.X              0.3              0.5

COMMENT 4
Note 1 - Summary of Significant Accounting Policies
---------------------------------------------------
In future filings please describe the composition of your statement of
operations line item "Revenues from industrial holdings" and "Goods and
materials purchased" and describe your related accounting policies. Quantify the
components of the revenue line item for the periods presented in your financial
statement footnotes or management's discussion and analysis section of your
document. Please provide us with your proposed future disclosure.

RESPONSE
In future filings we will include a description of our accounting policies
related to "Revenues from industrial holdings" and "Goods and materials
purchased" in Note 1. The text we plan to include reads as follows:

Revenues from industrial holdings include sales of goods and services from six
consolidated entities and are derived from various businesses. Revenue is
recognized upon customer acceptance of goods delivered and when services have
been rendered. Goods and materials purchased include costs for raw materials,
parts and finished goods purchased from third party suppliers to produce the
goods and services sold.

We would like to make the Staff aware that on 23 March 2006 we sold our entire
interest in Motor-Columbus, the company that most significantly contributed to
the line items "Revenues from industrial holdings" and "Goods and materials
purchased". On 2 June 2006, after the sale of Motor-Columbus we submitted a
restated Financial Report 2005 on Form 6-K to present Motor-Columbus as a
discontinued operation. Subsequent to that submission, we completed the disposal
of two additional companies of the Industrial Holdings segment in the second and
third quarter 2006. The companies in the Industrial Holdings segment were all
purchased with a view to their subsequent resale and those

<PAGE>

                                                  UBS AG
                                                  Form 20-F for the Year Ended
                                                  December 31, 2005
                                                  Filed March 21, 2006
                                                  File Number 001-15060
                                                  20 October 2006
                                                  Page 4 of 10

that have been sold are presented as discontinued operations in accordance with
IFRS 5. This change in presentation has the following effect if 2005 and 2004
are restated at 30 September 2006:

                                          Restated              Pre-restatement
CHF million                           2005        2004         2005        2004
                                     -----------------       ------------------
Revenues from industrial holdings    1,137       1,774       10,515       6,086
Goods and material purchased           493         679        8,003       3,885

In view of the size of the restated figures we trust that you will agree that
the proposed level of disclosure is sufficient and that a quantification of the
components would place unjustified emphasis on these figures.

COMMENT 5
e) Securitizations, page 81
---------------------------
We note your disclosures in Note 1(e) and (f) that you may hold retained
interests in securitized assets in the form of servicing assets/liabilities,
senior or subordinated tranches, interest only strips or other residual
interests. We also note your Note 33 on page 156 only quantifies the carrying
value of retained interests in agency mortgage securities. In future filings
please quantify, if material, the carrying values of each type of retained
interest and any associated liability related to your continuing involvement for
derecognition and securitization transactions. For the periods presented, please
provide us with your proposed future disclosure. Refer to paragraph 94(a) of IAS
32.

RESPONSE
We would like to advise the staff that at 31 December 2005, 2004 and 2003 we did
not hold material retained interests in securitized assets in the form of
servicing assets/liabilities, senior or subordinated tranches, interest only
strips or other residual interests, except retained interests in agency mortgage
securities, which we disclosed. In future filings, we will remove in Note 1 the
reference to all forms of retained interests where we do not have material
amounts. We also would like to point the staff to Note 29(e) of our financial
statements where we provide the disclosures asked for by paragraph 94(a) of IAS
32.

COMMENT 6
p) Loans, page 84
-----------------
We note you amortize fees and direct costs relating to loan origination,
refinancing, restructuring and loan commitments to interest income over the life
of the loan using the straight-line method and that this method approximates the
effective interest method. Please tell us the following:

     o   how you determine the period of time (expected life or contractual life
         of the loan) over which you amortize these fees and costs; and
     o   how you determined that the difference between using the straight-line
         method and using the effective interest method is not material for the
         periods presented.

Refer to paragraphs 9, 46 and AG5 - AG8 of IAS 39.

RESPONSE
Before we respond directly to the Staff's comment, we would like to advise the
Staff of the customary terms under which the Company issues loans to its
customers to provide appropriate context for our response. We believe that
without this information it may be difficult for the Staff to assess the
appropriateness of our accounting policies.

The lending activities of UBS are almost exclusively conducted through two of
our Business Groups, Global Wealth Management & Business Banking ("GWMBB") and
Investment Bank ("IB"). GWMBB
<PAGE>
                                                  UBS AG
                                                  Form 20-F for the Year Ended
                                                  December 31, 2005
                                                  Filed March 21, 2006
                                                  File Number 001-15060