ZURICH (Reuters) – UBS Chair Colm Kelleher warned on Sunday that the Swiss authorities’s plans to strengthen capital necessities for large banks might harm the nation’s place as a monetary centre.
The federal government earlier this yr laid out plans for more durable capital necessities for UBS and Switzerland’s three different large banks in a bid to make the monetary sector extra sturdy after the crash of Credit score Suisse final yr.
In an article printed 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 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 have been “believable”.
In a separate estimate, analysts at Autonomous Analysis mentioned UBS could have to retain an extra $10 billion to $15 billion.
Kelleher declined to touch upon figures, however mentioned that extreme capital necessities would harm competitiveness and result in much less beneficial costs on banking merchandise for patrons.
“We must always give attention to extra essential points similar to liquidity administration and, above all, the complete resolvability of a financial institution,” 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 below administration, in response to a 2021 Deloitte research. Nevertheless, 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 have been to break down, specialists have warned.
Kelleher downplayed the risks, saying UBS held “considerably extra” 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 further capital, mentioned Kelleher, who has been chair since 2022.
“Though we’re a world financial institution, the center of UBS is our Swissness,” he mentioned, including there was “no query” the lender would stop its house nation.
Nonetheless he warned if the financial institution needed to increase its capital ranges, it could be detrimental for Switzerland.
“If politics forces us to massively enhance our capital, then Switzerland has determined that it not needs to be a related worldwide monetary centre,” Kelleher mentioned.
“I feel 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.