ZURICH (Reuters) – UBS could be considered too big for Switzerland after it took over Credit Suisse, former Swiss finance minister Ueli Maurer said on Saturday, with measures needed to de-risk the enlarged bank.
“If you just look at the numbers and compare UBS to the Swiss economy, it is too big,” Maurer told the Tages-Anzeiger newspaper. Therefore, the risk must be reduced.
At around $1.7 trillion, UBS’s balance sheet is twice the size of Switzerland’s annual economic output, giving the bank exceptional weight in the larger economy.
If the bank fails, there are no more local rivals to absorb it, and the cost of nationalization could seriously damage public finances, experts warn.
Reducing risk is primarily the responsibility of shareholders through their choice of board members, Maurer said.
“They have to take responsibility, not the taxpayers at the end,” said Maurer, who stepped down months before Credit Suisse’s final collapse in March 2023.
“Legislative measures must also be examined,” said Maurer, who also defended himself after a recent parliamentary report raised questions about his actions as the Credit Suisse crisis worsened in late 2022.
The Swiss government last year outlined plans for tougher capital requirements for UBS and the other three big Swiss banks in a bid to shore up the financial sector after the collapse of Credit Suisse.
Details of the exact capital requirements are yet to be revealed, but the prospect that UBS could hold $15 billion to $25 billion in additional capital has been met with resistance from the bank.
Maurer said that if capital requirements were too high, Swiss banks would no longer be competitive and might be able to be based elsewhere.
“For the Swiss economy with many international multinational companies, a large bank is a locational advantage,” he said. “But the risks must be minimized.”
UBS declined to comment on the interview. The bank’s chief executive, Sergio Ermotti, told Migros magazine earlier this month that UBS has enough capital to cover potential problems.
The bank supported many of the Swiss government’s proposals to improve banking regulation, but they had to be targeted and proportionate, Ermotti told the magazine.
