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 harder capital necessities for UBS and Switzerland’s three different large 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 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 downside with is the rise in capital necessities. It simply does not make sense,” he mentioned in regards to 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 must 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 must always concentrate on extra essential points resembling 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 property beneath administration, based on a 2021 Deloitte examine. Nevertheless, competitors is rising from Luxembourg and particularly Singapore, which has grown quickly in recent times.
UBS – which has a stability sheet double the dimensions of annual Swiss financial output – would pose dire dangers for the Swiss economic system if it have been to break down, consultants 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 worldwide financial institution, the guts of UBS is our Swissness,” he mentioned, including there was “no query” the lender would give up its house nation.
Nonetheless he warned if the financial institution needed to elevate its capital ranges, it might be detrimental for Switzerland.
“If politics forces us to massively enhance our capital, then Switzerland has determined that it now not needs to be a related worldwide monetary centre,” Kelleher mentioned.
“I believe that can’t be within the nation’s curiosity.”
The previous Morgan Stanley govt mentioned he was prepared to talk with the federal government on its proposals.
