ZURICH (Reuters) – UBS Chair Colm Kelleher warned on Sunday that the Swiss authorities’s plans to strengthen capital necessities for large banks may harm the nation’s place as a monetary centre.
The federal government earlier this 12 months laid out plans for more durable 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 12 months.
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 an enormous downside with is the rise in capital necessities. It simply would 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 a further $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 should always concentrate on extra vital points similar to liquidity administration and, above all, the total 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 research. Nonetheless, competitors is rising from Luxembourg and specifically Singapore, which has grown quickly in recent times.
UBS – which has a steadiness sheet double the scale 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 hazards, 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 threat.
UBS remained dedicated to Switzerland even when Bern demanded an enormous improve 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 give up its house nation.
Nonetheless he warned if the financial institution needed to increase its capital ranges, it might 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 mentioned.
“I feel that can not be within the nation’s curiosity.”
The previous Morgan Stanley govt mentioned he was prepared to talk with the federal government on its proposals.