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Today, the National Council will review the 2024 Annual Report and discuss the fallout from Credit Suisse's collapse, including proposals to enhance FINMA's oversight and modify bonus policies. The assembly will also consider a controversial initiative for a 50% tax on large inheritances to fund climate measures, which faces opposition from the government.Meanwhile, the Council of States will address various legislative issues, including the suspension of funds for UNRWA and reforms to the Asylum Law, alongside discussions on cost-containment measures and cultural funding for 2025-2028.
The Swiss National Council is set to debate the lessons from Credit Suisse's collapse, focusing on remuneration policies for systemically important banks, particularly UBS. The discussion follows UBS CEO Sergio Ermotti's CHF 14.9 million salary announcement for 2024, amid scrutiny of past bonuses at Credit Suisse. Key issues include adapting "too big to fail" regulations and enhancing financial oversight to prevent future crises.
UBS has delayed its net zero emissions target from 2025 to 2035, attributing the setback to its acquisition of Credit Suisse, which expanded its corporate real estate portfolio. This decision follows a trend among banks reassessing climate commitments, with UBS remaining a member of the Net-Zero Banking Alliance while considering changes to its climate goals. The bank's latest sustainability report indicates a shift in focus, removing direct links between executive compensation and climate objectives.
Federal Councillor Karin Keller-Sutter addressed concerns over UBS's lobbying against stricter capital requirements, emphasizing the need to protect taxpayers and ensure a stable financial system. While acknowledging ongoing communication with UBS, she rejected a proposed salary cap for bank executives, advocating instead for accountability measures. The Federal Council aims to prevent future crises like the Credit Suisse collapse by ensuring that systemically important banks can be resolved effectively.
In Switzerland, cantonal banks benefit significantly from state guarantees, providing them with a competitive edge worth approximately 585 million francs annually. While these banks dominate the mortgage market, their tax exemptions and lower capital costs raise concerns about competition distortion and financial equalization among cantons. The debate intensifies as the EU questions the legitimacy of such state interventions.
Concerns are rising over the influence of powerful entities like banks and health insurance companies, which seem to operate with impunity, akin to states within a state. Following the upheaval at Credit Suisse, there are calls for accountability, yet rumors suggest UBS may relocate to the U.S., raising further questions about the stability of the financial sector. Meanwhile, Ermotti's substantial salary of 15 million a year remains a point of contention amidst these developments.
UBS has removed diversity targets from its 2024 annual report, shifting its focus to meritocracy. Previously, the bank aimed for 30% of management roles to be held by women and to increase ethnic minority representation among U.S. financial advisors. A spokesperson emphasized the commitment to a diverse workforce while prioritizing merit in hiring and promotions.
UBS CEO Sergio Ermotti's salary of CHF 14.9 million has sparked public outrage and calls for a salary cap for bankers, with critics arguing that such compensation is excessive. While Ermotti's pay includes a fixed salary of CHF 2.8 million and performance bonuses, some politicians advocate for limits to ensure moderation in executive compensation. The National Council is set to discuss a proposed cap on bankers' salaries, reflecting growing concerns over income inequality in the financial sector.
UBS's chairman and CEO have dismissed concerns about the bank's size following its acquisition of Credit Suisse, arguing that UBS's low-risk model and high asset quality make it safer than its predecessor. They emphasized the importance of maintaining competitive capital requirements while supporting government proposals for a more resilient financial system. UBS reported a profit of $5.1 billion for 2024 and plans to distribute a $0.90 per share dividend to shareholders.
Pierre-Yves Maillard, head of the Swiss Trade Union Confederation, criticized UBS CEO Sergio Ermotti's CHF 14.93 million salary, calling it excessive and disconnected from the realities faced by most people. While some parliamentarians support capping salaries in the banking sector, others argue against intervention in the free market, emphasizing the need for shareholder influence on compensation policies. The Council of States has proposed stricter remuneration rules for systemically important banks, with a motion to limit salaries to CHF 3-5 million awaiting consideration by the National Council.
Credit Suisse Strategic Income I
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