UBS's new head of investment banking Andrea Orcel admitted to MPs and peers that banks had become 'too arrogant, too self-convinced' in the runup to the banking crisis

Banks are "too arrogant" and must undergo sweeping cultural changes, a top banker at UBS said on Wednesday as the Swiss bank was described by the incoming archbishop of Canterbury, Justin Welby, as a "corrupted organisation".

At a hearing of the banking standards commission, UBS's new head of investment banking, Andrea Orcel, admitted to MPs and peers that banks had become "too arrogant, too self-convinced" before the banking crisis that helped to expose the rigging of interbank lending rates. UBS was hit with a record £940m fine as a result of the scandal last month.

"I think the industry has to change," said Orcel, who joined UBS in July and was dubbed the "Ronaldo of banking" by a commission member, while another called him a "deal junkie".

Chaired by the Conservative MP Andrew Tyrie, the commission was surprised by the bank's admission that it had fired only 18 of the 40 individuals who regulators said knew about the Libor rigging. Tyrie told Orcel that Libor rigging was "a shocker of enormous proportions".

Orcel – who at Merrill Lynch in 2007 advised Royal Bank of Scotland on its ill-fated takeover of ABN Amro, for which he is said to have received a £7.5m fee – insisted that the staff involved in manipulating Libor had been "dismissed, penalised or reprimanded". UBS said 22 people still employed by the bank had been disciplined.

One of those who left before the fine was imposed was named before the commission as Tom Hayes, who had been based in Japan. Andrew Williams, UBS's global head of compliance, said Hayes had been headhunted by Citigroup before his actions had been exposed – prompting laughter at the start of the lengthy hearing. "Clearly his conduct was reprehensible and we are all disgusted by it," Williams said.

The UBS bankers were unable to disclose the size of any bonuses paid to Hayes, who made $260m (£160m) in revenues for UBS during his tenure at the bank between 2006 and 2009. Williams said that it had not been possible to claw back any payments to him as he had forfeited them when lured to Citi.

Lord Lawson, the former Conservative chancellor and member of the commission, who named Hayes, was among those unconvinced by the bank's assertion that top management did not know about the rigging, which was discussed on electronic chat boards viewed by as many as 70 people. Lawson also expressed incredulity that only 18 people had been fired.

Hayes is facing extradition to the US on charges of conspiracy, wire fraud and an antitrust violation. Lawson said the regulatory investigation had shown him to be a "crook of the first order", to which the UBS executives declined to comment, citing the legal proceedings in the US.

Orcel, asked by Labour MP Pat McFadden how many of the traders at UBS were women, admitted that it was likely that more than 90% were male. "That is a failure of UBS," he replied when asked if a greater female presence would have helped to change the culture.

Orcel, who admitted that he would not have advised RBS to proceed with the ABN Amro takeover "with what we know now", said UBS was focused on "recovering the honour and the standing" of the bank. Even so, he said: "I can't tell you that it won't happen again" despite the changes made, which include bonuses no longer tied to individual revenue generation. The ratio of a traders' salary to their bonus could be as much as one to three, he said.

"I am convinced that we have made a lot of progress. I am also convinced that we still need to do more," Orcel said.

Four former UBS executives, including the former chief executive Marcel Rohner, will give evidence to the commission on Thursday, as will the newly knighted Hector Sants, the chief executive of the Financial Services Authority until just before Barclays was hit with a fine of £290m over Libor in June. The coalition set up the banking standards commission following the uproar caused by the Barclays fine.