ZURICH (Reuters) – UBS Chair Colm Kelleher warned on Sunday that the Swiss authorities’s plans to strengthen capital necessities for giant banks might harm the nation’s place as a monetary centre.
The federal government earlier this yr laid out plans for harder capital necessities for UBS and Switzerland’s three different massive banks in a bid to make the monetary sector extra strong after the crash of Credit score Suisse final yr.
In an article revealed within the Swiss newspaper SonntagsBlick, Kelleher stated he agreed with a lot of the 22 suggestions within the authorities’s report, aside from the proposal for extra stringent capital necessities.
“What I actually have a giant drawback with is the rise in capital necessities. It simply does not make sense,” he stated 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 stated estimates UBS would require one other $15 billion to $25 billion had been “believable”.
In a separate estimate, analysts at Autonomous Analysis stated UBS might have to retain an extra $10 billion to $15 billion.
Kelleher declined to touch upon figures, however stated that extreme capital necessities would harm competitiveness and result in much less beneficial costs on banking merchandise for patrons.
“We should always deal with extra essential points reminiscent of liquidity administration and, above all, the complete resolvability of a financial institution,” Kelleher advised the newspaper.
Swiss banks contribute to its function because the world’s high 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 financial system if it had been to break down, consultants 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 additional capital, stated Kelleher, who has been chair since 2022.
“Though we’re a world financial institution, the guts of UBS is our Swissness,” he stated, including there was “no query” the lender would stop its dwelling nation.
Nonetheless he warned if the financial institution needed to increase its capital ranges, it will be detrimental for Switzerland.
“If politics forces us to massively improve our capital, then Switzerland has determined that it now not desires to be a related worldwide monetary centre,” Kelleher stated.
“I feel that can not be within the nation’s curiosity.”
The previous Morgan Stanley govt stated he was prepared to talk with the federal government on its proposals.
