UBS CEO attacks ‘fearmongering’ over bank regulations

ZURICH, March 19 (Reuters) – Much of the trust Switzerland gained from mastering the Credit Suisse crisis three years ago has been jeopardised by focusing too much on risks and fears in the ensuing regulatory debate, UBS CEO Sergio Ermotti said on Thursday.

UBS bought its fallen rival in a state-engineered emergency takeover in March 2023 and completed the migration of all former Credit Suisse clients worldwide to its own platforms this week. 

“Durable stability requires sound judgment, consistency, and international coordination – not measures that may provide short-term reassurance but ultimately undermine resilience and prosperity,” Ermotti wrote in an opinion piece in Swiss newspaper Aargauer Zeitung.

“What is needed now is a sense of proportion and self-reflection, not fearmongering.”

The remarks come ahead of a regulatory showdown on capital rules for Switzerland’s remaining big bank. The Swiss government is expected to publish its proposed banking regulation before the end of April.

Ermotti specifically defended the validity of loss-absorbing instruments such as Additional Tier 1 (AT1) capital, which are set to play a key role in the upcoming regulatory debate in parliament. 

Internationally, these instruments remain accepted as regulatory capital, and they played a key role in the stabilisation and restructuring of Credit Suisse, Ermotti said.

Other countries are reviewing their regulatory frameworks to ensure that rules are targeted, proportionate, and economically justified, he added. 

Earlier this week, Reuters reported that the European Union plans to “neutralise” the impact on banks’ capital requirements of a global banking reform package devised in the wake of the global financial crisis. 

(Reporting by Ariane Luthi; Editing by Chizu Nomiyama )