ZURICH (Reuters) – UBS Chair Colm Kelleher warned on Sunday that the Swiss authorities’s plans to strengthen capital necessities for large banks may injury the nation’s place as a monetary centre.
The federal government earlier this 12 months laid out plans for more durable capital necessities for UBS and Switzerland’s three different huge banks in a bid to make the monetary sector extra strong after the crash of Credit score Suisse final 12 months.
In an article revealed within the Swiss newspaper SonntagsBlick, Kelleher mentioned he agreed with many of the 22 suggestions within the authorities’s report, apart from the proposal for extra stringent capital necessities.
“What I really have a big problem with is the increase in capital requirements. It just doesn’t make sense,” he mentioned concerning the so-called “too-big-to-fail” report.
Particulars of the precise capital necessities are but to emerge, though Finance Minister Karin Keller-Sutter in April mentioned estimates UBS would require one other $15 billion to $25 billion had been “plausible”.
In a separate estimate, analysts at Autonomous Analysis mentioned UBS might have to retain an extra $10 billion to $15 billion.
Kelleher declined to touch upon figures, however mentioned that extreme capital necessities would injury competitiveness and result in much less beneficial costs on banking merchandise for purchasers.
“We should focus on more important issues such as liquidity management and, above all, the full resolvability of a bank,” Kelleher informed the newspaper.
Swiss banks contribute to its function because the world’s prime monetary centre, with some $2.6 trillion in worldwide belongings underneath administration, in accordance with a 2021 Deloitte examine. Nonetheless, competitors is rising from Luxembourg and specifically Singapore, which has grown quickly in recent times.
UBS – which has a steadiness sheet double the dimensions of annual Swiss financial output – would pose dire dangers for the Swiss economic system if it had been to break down, specialists have warned.
Kelleher downplayed the hazards, saying UBS held “significantly more” capital than comparable banks, whereas the financial institution’s enterprise mannequin – primarily based on wealth administration and the Swiss home market – meant it was low danger.
UBS remained dedicated to Switzerland even when Bern demanded a giant enhance in additional capital, mentioned Kelleher, who has been chair since 2022.
“Although we are a global bank, the heart of UBS is our Swissness,” he mentioned, including there was “no question” the lender would stop its residence nation.
Nonetheless he warned if the financial institution needed to elevate its capital ranges, it will be detrimental for Switzerland.
“If politics forces us to massively increase our capital, then Switzerland has decided that it no longer wants to be a relevant international financial centre,” Kelleher mentioned.
“I think that cannot be in the country’s interest.”
The previous Morgan Stanley government mentioned he was prepared to talk with the federal government on its proposals.
