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Swiss lawmakers are delaying the introduction of a permanent public liquidity backstop (PLB) for major banks, linking it to a forthcoming government proposal on capital requirements. This decision, made by an upper house committee, could postpone the PLB's implementation until after 2026, as discussions will wait for clarity on regulations for systemically important banks. The committee's stance follows a review of the financial sector's oversight after the collapse of Credit Suisse.
UBS Group reported a fourth-quarter net profit of $770 million, surpassing forecasts, but shares fell 5.5% due to a lackluster buyback plan tied to Swiss capital rules. The bank plans to repurchase $1 billion in shares in the first half of 2025 and up to $2 billion in the second half, contingent on regulatory stability. Despite strong revenue growth and successful integration of Credit Suisse, net new assets in wealth management fell short of expectations, raising concerns among investors.
UBS CEO Sergio Ermotti warned that higher capital requirements for the bank, deemed systemically relevant, would lead to increased costs for companies and households. He urged Swiss authorities to maintain current regulations, arguing that UBS's ability to rescue Credit Suisse demonstrates the adequacy of existing capital strength. Ermotti also emphasized the need for a cost-benefit analysis regarding regulatory changes, asserting that Switzerland's status as a financial hub could be jeopardized by stricter requirements for foreign subsidiaries.
UBS CEO Sergio Ermotti warned that higher capital requirements for the bank, deemed systemically relevant, would lead to increased costs for companies and households. He urged Swiss authorities to maintain current regulations, arguing that UBS's ability to rescue Credit Suisse demonstrates the adequacy of existing capital strength. Ermotti also emphasized the need for a cost-benefit analysis regarding regulatory changes, asserting that Switzerland's financial center ambitions are at odds with stricter capital demands for foreign subsidiaries.
UBS CEO Sergio Ermotti warned that higher capital requirements for the bank, deemed systemically relevant, would lead to increased costs for companies and households. He urged Swiss authorities to maintain current capital standards to support the nation's financial sector and avoid risks similar to those faced by Credit Suisse. Ermotti also dismissed a recent study suggesting UBS benefits from a state guarantee, claiming it relied on outdated data.
UBS has received a waiver from the U.S. Department of Labor, allowing it to continue managing $11 billion in U.S. retirement plans after a paperwork error jeopardized its status. The exemption, retroactive to June 2023, follows the bank's merger with Credit Suisse and is valid until June 2029, despite UBS's past legal issues. The bank expressed regret over the oversight, which necessitated adjustments to its compliance team to avoid losing clients.
UBS CEO Sergio Ermotti cautioned against imposing excessive banking regulations in Switzerland, warning that it could disadvantage the country’s financial sector compared to global competitors. As Swiss authorities prepare stricter rules following Credit Suisse's collapse, Ermotti emphasized that existing regulations were already sufficient and that big banks like UBS are now stabilizing forces. He also noted the smooth integration of Credit Suisse into UBS, despite challenges in IT migration.
Swiss lawmakers have criticized the oversight of Credit Suisse's collapse, attributing the failure primarily to the bank's management while acknowledging the authorities' lack of transparency and haphazard crisis response. The inquiry's report recommends strengthening regulatory frameworks and ensuring better communication among officials to prevent future crises. UBS's acquisition of Credit Suisse has left Switzerland with only one major international bank, prompting calls for reforms to enhance financial stability.
Swiss lawmakers have criticized the oversight of Credit Suisse's collapse, primarily blaming the bank's management while highlighting regulatory failures. A 569-page report from a parliamentary committee revealed a lack of transparency and urged reforms, including strengthening the financial regulator FINMA and ensuring adequate capital buffers for major banks like UBS.
Switzerland's parliamentary report on the Credit Suisse collapse outlines 30 recommendations to prevent future crises, emphasizing the need for stricter regulations on systemically important banks like UBS. Key proposals include limiting executive bonuses during downturns, enhancing FINMA's powers, and establishing a public liquidity backstop to stabilize the financial system. The report also highlights the importance of improved information sharing among key officials during crises.
Ariane Luthi
People
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