UBS CEO Sergio Ermotti cautioned Switzerland against implementing overly strict banking regulations, warning such measures could disadvantage the nation’s financial sector on the global stage. His remarks come as Swiss authorities prepare to introduce tougher rules following UBS’s acquisition of Credit Suisse, which collapsed in 2023.
Speaking to Migros-Magazin, Ermotti said that while ensuring stability is crucial, Switzerland should avoid being overly compliant compared to competing financial hubs like London, Hong Kong, and Singapore. “Switzerland can’t afford to fall back into a ‘model student syndrome’ and introduce rules that don’t apply in other countries,” he emphasized.
Stricter Rules Under Scrutiny
The impending regulations aim to prevent a repeat of the Credit Suisse crisis, which left UBS as Switzerland’s sole global bank. While UBS acknowledges the need for strong safeguards, Ermotti argued that tighter rules across the board could weaken Switzerland’s competitive edge in the global financial market.
Ermotti also pointed to a Swiss parliamentary investigation’s findings that Credit Suisse’s downfall stemmed from internal mismanagement and regulatory lapses. He asserted that existing rules, had they been properly enforced, could have prevented the collapse.
Confidence in Stability
Ermotti maintained that big banks like UBS have become stabilizing forces rather than risks, having learned from past crises. He reassured that UBS has robust reserves to cover potential losses, making taxpayer bailouts highly unlikely. “Even if UBS had a problem, it would be highly unlikely that the taxpayer would lose a franc,” he said.
Integration of Credit Suisse
The UBS CEO described the ongoing integration of Credit Suisse as smooth but acknowledged challenges, particularly with complex IT migrations.
On Pay and Leadership
Ermotti, who earned 14.4 million Swiss francs ($15.96 million) in 2023, addressed questions about his remuneration. He said his compensation aligns with competitors and reflects his performance. Reminiscing about his first job as an apprentice, he noted his initial salary was a modest 350 Swiss francs ($388).
As Swiss regulators finalize their proposed rules, Ermotti’s comments highlight the delicate balance between ensuring financial stability and maintaining global competitiveness.
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