Inequality levels in Europe have been accelerated as a result of historically low-interest rates, according to the chief executive of UBS.

The European Central Bank (ECB) opted to cut interest rates in the euro zone to zero percent in March 2016 and has pumped more than a trillion euros into the economy through its bond-buying program.

"I think if the collateral damage of low (interest) rates or negative rates would only affect banks, it would be okay..." Sergio Ermotti, UBS chief executive, told CNBC on Tuesday in Davos, Switzerland.

"But it is starting to affect savings, most pension fund systems, insurance companies and the confidence of people who have been saving money thinking that they can leave a little bit out of their income to continue to prosper. It is creating this sense of inequality that goes on in Europe," Ermotti added.