ZURICH (Reuters) – UBS could be seen as too big for Switzerland following its takeover of Credit Suisse, former Swiss Finance Minister Ueli Maurer said on Saturday, and measures are needed to reduce risks to the enlarged bank.
“If we look only at the numbers and compare UBS with the Swiss economy, we see that it is too big,” Maurer told the Tages-Anzeiger newspaper. “Therefore, it is necessary to reduce the risk.”
At around $1.7 trillion, UBS’s balance sheet doubles the size of Swiss annual economic output, giving the bank exceptional weight for a major economy.
If the bank fails, there will be no local rivals left to take it over, while the cost of nationalization could severely damage public finances, experts warned.
Risk reduction was primarily the responsibility of shareholders through the election of board members, Maurer said.
“Ultimately, they must bear the responsibility, not the taxpayers,” 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.
Last year, the Swiss government laid out plans for stricter capital requirements for UBS and Switzerland’s other big three banks in a bid to strengthen the financial sector after the demise of Credit Suisse.
Details of the exact capital requirements have yet to emerge, but the possibility that UBS could be forced to hold between $15 billion and $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 look to establish themselves elsewhere.
“For the Swiss economy, with its numerous international multinationals, a large bank is a geographical advantage,” he said. “But the risks must be minimized.”
The USB did not want to comment on the interview. The bank’s CEO, Sergio Ermotti, told Migros magazine earlier this month that UBS had 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 specific and proportionate, Ermotti told the magazine.