Robert Wolf marched into Wharton 30 years ago as a young football recruit for the University of Pennsylvania. He recently marched in again, this time as chairman and CEO of UBS Group Americas and president of UBS Investment Bank.

During a Wharton Leadership Lecture, Wolf said he came to Wharton as a “young, brash, punky-type kid,” and that his ability to straddle “the line [between] confidence and arrogance” led him from the football field to Wall Street and up the leadership chain. But much like the industry that supported his 26-year rise, Wolf has discovered that brazen bravado has its limits. As one of a handful of industry leaders called upon by the government in September 2008 to help save Lehman Brothers, he watched helplessly as the effort to rescue the giant investment bank failed.

Today, Wolf believes the financial industry needs to take a step back in order to move forward. And after realizing that the outspoken confidence which brought him through the ranks has also prevented him from ever attaining his company’s top post, Wolf, too, has decided to step back: As of January 1, he will relinquish his role as regional CEO and step down from the bank’s group executive board. He will remain chairman of UBS Group Americas and president of the Investment Bank in the Americas, heading the firm’s client initiatives in the U.S. as well as its efforts in Washington.

“I’ve gone as high as I’m going to go, and I’ve lost a little bit of my ambition,” he confessed to his audience during a question and answer period. Back in 2004, Wolf gave up his position as global head of fixed income to become the bank’s chief operating officer, and he was made CEO of the Americas region in October 2007.

Regarding his experience working for a global financial institution that is based in Switzerland, Wolf said: “I’m a pretty vocal guy, and I work for an international firm. There were times particularly [during the financial crisis] I thought [UBS] should change in certain ways…. But they didn’t make those changes…. Maybe I should have approached the management differently, knowing that there is a cultural difference. I’m viewed a little more as a cowboy.”

‘Testosterone Times Ten’

Wolf began his career as a young athlete “from a little ocean town near Boston” who got a chance to play Division 1 football at the University of Pennsylvania. He studied health care administration at Wharton, graduated with a B.S. degree in economics in 1984, and planned to go to medical school. To make sure the interviews would go well, he decided to practice by sending his resume to some firms on Wall Street. Salomon Brothers gave him an interview, and he was hooked.

“I remember the guy [at Salomon] saying, ‘You’re not our typical candidate. We like you but we’re looking for somebody who is really a rocket scientist-jock.'” Wolf recalled replying, “Well, that’s me — I played college football and graduated Wharton.” People want to be with people who believe they are good, Wolf noted, but also with “people who have outside-the-box experiences and take risks. From college on, I was okay taking those risks. It differentiated me. I was able to go in and interview and be myself.” Once he was in the trading environment, “it was testosterone times 10” and felt much like the football locker room. “It was a homogeneous [all] male floor, high-fiving, loud screaming — exactly what I was looking for at 21 years old.”

Opting for Wall Street over medical school was one of the first big risks of his career, Wolf said. After that, as a trader at Salomon Brothers for the next decade, the risks came daily, with every trade. Michael Lewis’ 1989 book, Liar’s Poker, describes the rise and fall of Salomon Brothers, which eventually became a subsidiary of Citigroup. “Multiply it by 10 and you’ve got the facts,” Wolf said of the book. He left the company in 1994 to join UBS.

Over time, Wall Street’s risk taking led to excess leverage and the financial crisis. But looking back at a quarter of a century in financial services, Wolf finds reason to be optimistic about the industry’s future. He was still a young trader on October 19, 1987, when stocks took a record, stomach-churning decline on Black Monday. During the late 1980s and early 1990s, he witnessed the savings and loan crisis, and a few years later the financial crises in Mexico and Asia. And now, the industry is struggling to recover from the housing bubble and the credit crunch. “If I look back at my career, there have been five or six times that the industry has taken a major step back, only to take two steps forward,” Wolf said. “There’s not one of those times, though, that we didn’t come back stronger.”

Regulatory reform is not only needed but will help in the long run, Wolf said. He points to the last big era of regulatory reform — in 1933, when the debate was about creating the Federal Deposit Insurance Corporation. “That is the best thing that this country has had in the last 85 years,” Wolf suggested. “It’s the thing that made everyone feel safe [about] putting money into banks…. We’re screaming about regulatory reform and we’re yelling about the Dodd-Frank bill, but I’m telling you, we will get [past this]. We’ll be a stronger industry for it.”

Masters of the Universe

According to Wolf, creating a resolution authority that could take over and wind down troubled companies might prevent another crisis like the “surreal” weekend in September 2008 when he was called to the New York Fed for an emergency meeting to try to save Lehman Brothers.

Having no idea what the meeting was about, the group walked into the room as “masters of the universe and we realized quickly how not-smart we were,” Wolf recalled. The group brought their best ideas to the table, he noted, because they wanted Lehman to survive. The government had no authority to take over the company and wind it down — the only solution was to either invest in it or find another company to do so. But Lehman held too many assets that could not be priced. “I think that when we realized the gap, which was on Saturday, it was scary,” Wolf said. “I mean, you’re talking about $40 billion, $50 billion, $60 billion, $70 billion of finance being needed when everyone was struggling with their own finances.”

That weekend, and the weeks that followed, exposed the extent of leverage throughout the financial system. When Wolf became president of the UBS Investment Bank in October of 2007, he pointed out, UBS was 55 times levered with a $2.4 trillion balance sheet. It was not that the leaders of any single institution failed. “We were all doing the same thing. All of us were levered beyond imagination. Actually, what failed is that the pure-play investment bank didn’t work anymore. It just didn’t work…. It took 10 years to build and six months to break.”

Today, the universe of investment titans has shrunk. Bear Stearns and Lehman are gone. Merrill Lynch became part of Bank of America. Goldman Sachs and Morgan Stanley have shifted to a more traditional banking model. As the frenzy has died down, so have the risks. “There used to be 15 of us. Now there are 10,” Wolf said. “And there’s enough business in a de-levered environment for 10 of us. So I actually think the risks going forward in our industry are a lot less than they have ever been.”

The new pace seems to have come at a good time for Wolf, who says he is ready to slow down a little and define himself less as a CEO and more as a thought leader, coach, father, husband and member of President Obama’s Economic Recovery Advisory Board. “You’ve got to find a work-life balance that allows you to be in business for 26 years [while] having other things,” said Wolf. “I can give you the idea of [what it is like] going up, and going down. And I’d rather be the one to tell myself it’s time to go down rather than have them tell me.”