In an exclusive interview with CNBC, Orcel backed the move - which saw 10,000 members of staff lose their jobs in 2012 - and said that as a result the bank's focus was now on equities.
"Clearly our model is very equity-heavy, meaning the incidents of our equity business on the overall model is much larger than the one at every other investment bank," he told CNBC.
"You could argue that in very favorable fixed-income markets, we are going to underperform relative to others and that is probably true."
But Orcel said the fixed-income areas it had exited were very capital- and risk-intensive "not only from a regulatory standpoint, but from what UBS and the markets will expect to see in the future."
(Read more: ECB was 'very pragmatic' to cut rates: UBS CEO )
He added: "If the market turns and equity is not the flavor of the day anymore, clearly we're going to be affected. But there is no intention to develop the fixed income business in what it was, because what it was is not going to work in those markets as well."
The Swiss bank's retreat from fixed income was part of a wider effort for it to return to its private banking roots. Earlier this year, UBS was named the largest private bank in the world by London-based wealth management consultant Scorpio Partnership - stripping Bank of America of the title - as inflows surged.
Speaking at the Swiss bank's European Conference in London, Orcel said one of the "biggest risks" facing UBS and its efforts to reach its targets was the regulatory environment.
"The biggest risk is probably - like for everybody else - the regulatory environment, economic environment, market environment," he said, but added that he was confident UBS' business model was working.
(Read more: UBS profit beats but hurt by new capital demands )
Orcel also addressed the issue of executive pay, saying concerns over compensation across the industry were "valid." It comes after UBS awarded him 25 million Swiss francs ($27 million) when he joined the investment bank from Bank of America in 2012, stirring up debate about the issue in Switzerland.
"I absolutely understand the market, the environment. Everything has changed dramatically vis-a-vis what it was even a year ago, if not five years or 10 years," he said. "So the concerns are valid and are being taken into account."
He added that UBS compensation is closely linked to performance.
"Last year we did not compensate because the performance was not there," he said. "I don't think that there is any there organisation that has taken such a clear draconian view on compensation as we have at least in the investment bank."
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image: © Torpe