UBS chair warns in opposition to massive improve in capital necessities, newspaper stories By Reuters

ZURICH (Reuters) – UBS Chair Colm Kelleher warned on Sunday that the Swiss authorities’s plans to strengthen capital requirements for large banks would possibly hurt the nation’s place as a financial centre.

The federal authorities earlier this yr laid out plans for more durable capital requirements for UBS and Switzerland’s three totally different large banks in a bid to make the financial sector further robust after the crash of Credit score rating Suisse remaining yr.

In an article revealed inside the Swiss newspaper SonntagsBlick, Kelleher acknowledged he agreed with lots of the 22 recommendations inside the authorities’s report, apart from the proposal for further stringent capital requirements.

“What I even have an enormous downside with is the rise in capital requirements. It merely doesn’t make sense,” he acknowledged regarding the so-called “too-big-to-fail” report.

Particulars of the exact capital requirements are however to emerge, although Finance Minister Karin Keller-Sutter in April acknowledged estimates UBS would require one different $15 billion to $25 billion had been “plausible”.

In a separate estimate, analysts at Autonomous Evaluation acknowledged UBS may need to retain an additional $10 billion to $15 billion.

Kelleher declined to the touch upon figures, nevertheless acknowledged that excessive capital requirements would hurt competitiveness and end in a lot much less useful prices on banking merchandise for patrons.

“We must always at all times cope with further important factors harking back to liquidity administration and, above all, the entire resolvability of a monetary establishment,” Kelleher suggested the newspaper.

Swiss banks contribute to its operate as a result of the world’s excessive financial centre, with some $2.6 trillion in worldwide belongings beneath administration, in accordance with a 2021 Deloitte analysis. Nonetheless, rivals is rising from Luxembourg and notably Singapore, which has grown shortly these days.

UBS – which has a steadiness sheet double the size of annual Swiss monetary output – would pose dire risks for the Swiss monetary system if it had been to interrupt down, consultants have warned.

Kelleher downplayed the hazards, saying UBS held “significantly further” capital than comparable banks, whereas the monetary establishment’s enterprise model – based mostly totally on wealth administration and the Swiss dwelling market – meant it was low hazard.

UBS remained devoted to Switzerland even when Bern demanded an enormous enhance in extra capital, acknowledged Kelleher, who has been chair since 2022.

“Although we’re a world monetary establishment, the heart of UBS is our Swissness,” he acknowledged, together with there was “no question” the lender would cease its dwelling nation.

Nonetheless he warned if the monetary establishment wanted to extend its capital ranges, it will likely be detrimental for Switzerland.

“If politics forces us to massively enhance our capital, then Switzerland has decided that it not needs to be a associated worldwide financial centre,” Kelleher acknowledged.

“I really feel that may not be inside the nation’s curiosity.”

The earlier Morgan Stanley govt acknowledged he was ready to speak with the federal authorities on its proposals.