ZURICH (Reuters) - UBS CEO Sergio Ermotti on Wednesday urged authorities to improve their ability to detect problems at banks as he sought to find common ground over efforts to overhaul the Swiss banking sector following the 2023 demise of Credit Suisse.

UBS is at the heart of the debate on new regulations because of the significance it assumed when it acquired the stricken Credit Suisse, and the question of how much extra capital it should hold to be sufficiently robust is highly contentious.

The bank says saddling UBS with excessive capital demands would put it and the Swiss financial centre at a disadvantage, and in a memo to staff he posted online, Ermotti urged authorities to act prudently when drawing up new rules.

He backed key planks of reform proposals set out by the government and said it was important that authorities are able to detect potential weaknesses earlier.

"Public stress tests like those used in the U.S. and other jurisdictions can better pinpoint the strengths and weaknesses of financial institutions," Ermotti said.

He also backed steps that would address canceling and clawing back compensation from people who had been negligent.

Speaking earlier on at the European Financials Conference organized by Morgan Stanley, Ermotti said he expected more clarity in May on the capital requirements question, but noted that UBS does not control the political process.

(Reporting by Dave Graham, Oliver Hirt and Ariane Luthi, Editing by Victoria Waldersee)