UBS is currently facing scrutiny in the United States over its license to manage pension fund assets. Activists are calling for the revocation of the bank's license due to a series of criminal offenses committed by UBS and its subsidiary, Credit Suisse.
UBS has a troubled history, having paid around $20 billion in fines for 96 financial crimes between 2000 and 2023. Credit Suisse has faced 52 similar charges and incurred approximately $12 billion in fines during the same period. This raises concerns about UBS's corporate culture and compliance practices.
The U.S. Department of Labor is investigating whether UBS can continue operating in the U.S. pension fund market, which oversees around $30 trillion in assets. A coalition of tax law activists has petitioned the authorities to reconsider UBS's eligibility to manage these funds. The issue revolves around the regulatory framework for banks with criminal records.
The U.S. Department of Labor has tightened its rules for granting exemptions, considering serious criminal misconduct as a warning sign of potential compliance issues. This marks a potential turning point for UBS as the agency will scrutinize the bank's corporate culture more closely.
The potential revocation of UBS's license could have significant implications for the banking industry, particularly for European banks operating in the U.S. market. Activists aim to send a message that all financial institutions must adhere to the same standards of conduct.
UBS has submitted an application for a temporary exemption and expressed confidence in its compliance efforts. However, the outcome of the investigation is uncertain. The decision regarding UBS's license could set a precedent for how regulatory bodies handle banks with criminal histories in the future.
If UBS were to lose its license, it would impact the bank's operations and potentially lead to a reassessment of compliance practices and corporate governance structures in the industry.