ZURICH (Reuters) – UBS may be seen as too big for Switzerland after its takeover of Credit Suisse, with measures taken to limit the enlarged bank's risks, former Swiss Finance Minister Ueli Maurer said on Saturday.
“If you look at the numbers alone and compare UBS to the Swiss economy, they are very large,” Maurer told the Tages-Anzeiger newspaper. “So the risks must be reduced.”
UBS's balance sheet is about $1.7 trillion, twice the size of Switzerland's annual economic output, giving the bank exceptional weight for a large economy.
Experts warned that if the bank failed, there would be no local competitors to absorb it, while the cost of nationalization could severely damage public finances.
Maurer said that risk reduction falls primarily on shareholders through their selection of board members.
“They have to take responsibility, not the taxpayers in the end,” said Maurer, who left his position months before Credit Suisse’s eventual 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 at the end of 2022.
Last year, the Swiss government made plans to tighten capital requirements on UBS and the other three major banks in Switzerland in an attempt to make the financial sector stronger after the collapse of Credit Suisse.
Details of the exact capital requirements have not yet emerged, but the prospect of having UBS hold an additional $15 billion to $25 billion in capital has been met with resistance from the bank.
If capital requirements are too high, Swiss banks will not be able to compete and may look to operate elsewhere, Maurer said.
“For the Swiss economy, with many international multinationals, the presence of 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 CEO Sergio Ermotti earlier this month told Migros magazine that UBS has enough capital to cover potential problems.
Ermotti told the magazine that the bank supported many of the Swiss government's proposals to improve banking regulation, but they must be targeted and proportionate.
