ZURICH (Reuters) – UBS Chair Colm Kelleher warned on Sunday that the Swiss authorities’s plans to strengthen capital necessities for giant banks may injury the nation’s place as a monetary centre.
The federal government earlier this 12 months laid out plans for harder capital necessities for UBS and Switzerland’s three different huge banks in a bid to make the monetary sector extra sturdy after the crash of Credit score Suisse final 12 months.
In an article printed within the Swiss newspaper SonntagsBlick, Kelleher mentioned he agreed with many of the 22 suggestions within the authorities’s report, aside from the proposal for extra stringent capital necessities.
“What I actually have a giant downside with is the rise in capital necessities. It simply does not 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 “believable”.
In a separate estimate, analysts at Autonomous Analysis mentioned UBS might must retain a further $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 must always give attention to extra vital points similar to liquidity administration and, above all, the total resolvability of a financial institution,” Kelleher informed the newspaper.
Swiss banks contribute to its position because the world’s prime monetary centre, with some $2.6 trillion in worldwide belongings underneath administration, in accordance with a 2021 Deloitte research. Nonetheless, competitors is rising from Luxembourg and particularly Singapore, which has grown quickly lately.
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 “considerably extra” capital than comparable banks, whereas the financial institution’s enterprise mannequin – based mostly on wealth administration and the Swiss home market – meant it was low danger.
UBS remained dedicated to Switzerland even when Bern demanded a giant improve in further capital, mentioned Kelleher, who has been chair since 2022.
“Though we’re a worldwide financial institution, the guts of UBS is our Swissness,” he mentioned, including there was “no query” the lender would give up its residence nation.
Nonetheless he warned if the financial institution needed to elevate its capital ranges, it could be detrimental for Switzerland.
“If politics forces us to massively improve our capital, then Switzerland has determined that it not needs to be a related worldwide monetary centre,” Kelleher mentioned.
“I believe that can not be within the nation’s curiosity.”
The previous Morgan Stanley government mentioned he was prepared to talk with the federal government on its proposals.
