ZURICH (Reuters) – UBS could possibly be seen as being too massive for Switzerland following its takeover of Credit score Suisse, former Swiss Finance Minister Ueli Maurer stated on Saturday, with measures wanted to scale back the dangers of the enlarged financial institution.
“If you look at the numbers alone and compare UBS with the Swiss economy, it is too big,” Maurer informed newspaper Tages-Anzeiger. “Therefore, the risk must be reduced.”
At round $1.7 trillion, UBS’s steadiness sheet is double the scale of annual Swiss financial output, giving the financial institution distinctive weight for a serious economic 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 injury public funds, specialists have warned.
Decreasing dangers was primarily the accountability of shareholders by way of their selection of board members, Maurer stated.
“They must take responsibility, not the taxpayers in the end,” stated Maurer, who left workplace months earlier than the ultimate collapse of Credit score Suisse in March 2023.
“Legislative measures must also be examined,” stated Maurer, who additionally defended himself after a latest 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 more durable capital necessities for UBS and Switzerland’s three different massive banks in a bid to make the monetary sector extra strong after Credit score Suisse’s demise.
Particulars of the precise capital necessities are but to emerge, however the risk that UBS could possibly be made to carry $15 billion to $25 billion in extra capital has met resistance from the financial institution.
Maurer stated if the capital necessities have been too excessive, Swiss banks would not be aggressive and will look to be primarily based elsewhere.
“For the Swiss economy with its many international multi-nationals, a large bank is a locational advantage,” he stated. “But risks must be minimized.”
UBS has been approached for remark.
