ZURICH (Reuters) – Switzerland’s main banking lobby on Friday said the Swiss economy could face serious consequences if UBS were driven away, intensifying warnings about the risks of hitting the bank with excessive regulations.
Switzerland is drawing up stricter banking rules to make the sector more robust after the 2023 collapse of Credit Suisse. UBS acquired its old rival, raising concern about the potential risk to the economy the enlarged bank posed.
UBS says it has no plans to leave, though people familiar with its thinking say there is concern it could become a takeover target if it is unduly held back, and that it has considered all scenarios, including moving its headquarters.
The Credit Suisse takeover made UBS the only big international bank left in Switzerland, and the regulatory back-and-forth on how to prevent another crisis has centred on the amount of additional capital the bank should hold.
UBS says it is well capitalised and that excessive capital requirements would put it at a disadvantage to rivals, undermining the competitiveness of the Swiss financial sector.
The Swiss Bankers Association said last month that if new regulations were too onerous, that could encourage a UBS exit.
In a report setting out the benefits that banking has brought to the Swiss economy, the SBA said the country needed to maintain an internationally competitive financial sector – and addressed the costs of a potential UBS departure.
“A potential relocation of the remaining big bank could … have serious consequences in the medium term,” the SBA said.
“A strategy that no longer focuses on global business activities, but rather on a predominantly regulatory and economic orientation towards the EU, could significantly disadvantage banking sector activities, especially in other, growing regions of the world, without any related advantages.”
A decline in Switzerland’s financial sector could hurt economic output, jobs, strain public finances and limit access to capital for businesses, the SBA said.
Switzerland’s government is due to present its proposals for new capital rules in early June.
(Reporting by Dave Graham and Oliver Hirt; editing by Barbara Lewis)
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