Former Swiss finance minister warns about dimension of enlarged UBS, newspaper says

ZURICH (Reuters) -UBS could possibly be seen as being too huge for Switzerland following its takeover of Credit score Suisse, former Swiss Finance Minister Ueli Maurer stated on Saturday, with measures wanted to cut back the dangers of the enlarged financial institution.

“For those who take a look at the numbers alone and evaluate UBS with the Swiss financial system, it’s too huge,” Maurer advised newspaper Tages-Anzeiger. “Due to this fact, the chance should be decreased.”

At round $1.7 trillion, UBS’s steadiness sheet is double the dimensions of annual Swiss financial output, giving the financial institution distinctive weight for a serious financial system.

Ought to the financial institution fail, there aren’t any native rivals left to soak up it, whereas the price of nationalisation might severely harm public funds, consultants have warned.

Decreasing dangers was primarily the accountability of shareholders by way of their alternative of board members, Maurer stated.

“They have to take accountability, not the taxpayers ultimately,” stated Maurer, who left workplace months earlier than the ultimate collapse of Credit score Suisse in March 2023.

“Legislative measures should even be examined,” stated Maurer, who additionally defended himself after a current parliamentary report raised questions on his actions because the Credit score Suisse disaster worsened on the finish of 2022.

The Swiss authorities final yr laid out plans for harder capital necessities for UBS and Switzerland’s three different huge banks in a bid to make the monetary sector extra sturdy after Credit score Suisse’s demise.

Particulars of the precise capital necessities are but to emerge, however the chance that UBS could possibly be made to carry $15 billion to $25 billion in further capital has met resistance from the financial institution.

Maurer stated if the capital necessities had been too excessive, Swiss banks would now not be aggressive and should look to be primarily based elsewhere.

“For the Swiss financial system with its many worldwide multi-nationals, a big financial institution is a locational benefit,” he stated. “However dangers should be minimized.”

UBS declined to touch upon the interview. The financial institution’s CEO Sergio Ermotti earlier this month advised Migros Journal that UBS had sufficient capital to cowl potential issues.

The financial institution supported most of the Swiss authorities’s proposals to enhance banking regulation, however they needed to be targetted and proportionate, Ermotti advised the journal.