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Two years after UBS's acquisition of Credit Suisse, relations between UBS and the Swiss Confederation have soured. Initially united in averting a financial crisis, public disagreements have emerged between UBS CEO Sergio Ermotti and Federal Councilor Karin Keller-Sutter, signaling a significant shift in their partnership.
UBS is contemplating relocating its headquarters due to proposed capital demands of 25 billion francs, which could significantly impact its profitability and competitive edge. CEO Sergio Ermotti warns that increased requirements may lead to operational costs of up to $3 billion annually, risking customer trust and employment in Switzerland. As discussions continue, the Finance Minister emphasizes the need for a collaborative resolution to maintain UBS's presence and stability in the Swiss financial landscape.
The debate over UBS potentially relocating its headquarters abroad is misguided, as both UBS and Switzerland are interdependent. Relocation would incur significant costs and jeopardize client relationships, while UBS plays a crucial role in the Swiss economy by securing jobs and contributing as a major taxpayer. A collaborative solution is essential for the benefit of both parties.
UBS Group AG is considering relocating its headquarters if Switzerland enforces a $25 billion capital requirement, which executives believe would hinder competitiveness. The Swiss government insists on full accounting for foreign subsidiaries to prevent financial instability, but UBS views this as excessive. As lobbying intensifies, the bank faces pressure from shareholders and regulatory challenges, with potential changes unlikely before 2028.
UBS is reportedly contemplating relocating its headquarters abroad due to the Swiss government's proposed capital requirements of 25 billion francs, which the bank argues would hinder its competitiveness and investor appeal. The Federal Department of Finance insists these measures are necessary following the Credit Suisse bailout, while UBS maintains that such regulations are excessive. Despite previous assurances from CEO Sergio Ermotti that an exit was not on the agenda, growing shareholder pressure may influence the bank's decision.
The podcast "Apropos" features author Arthur Rutishauser discussing his documentary "Game Over - The Fall of Credit Suisse," which explores the bank's long history of scandals and mismanagement leading to its merger with UBS in March 2023. The film highlights themes of greed, arrogance, and the failure to heed warning signs throughout the decades.
UBS is contemplating relocating its headquarters from Switzerland due to escalating tensions with the Swiss government over a proposed CHF 25 billion capital requirement. The bank argues that this surcharge would hinder its competitiveness and attractiveness to investors, while the government insists on the necessity of the measures following the Credit Suisse rescue. Although UBS previously stated that leaving was not on the agenda, the situation appears to be evolving.
Socialist Roger Nordmann and Finance Minister Karin Keller-Sutter emphasize the need for political unity against UBS's influence, advocating for increased equity capital for the bank. While parliament supports this move, concerns arise about potential cost implications for customers, with regional banks poised to benefit if UBS raises prices. The Federal Council backs the capital requirement, asserting it won't necessarily lead to higher costs for Swiss credit operations.
A parliamentary commission investigating the Credit Suisse debacle is proposing to limit the Federal Council's powers in future inquiries, citing concerns over conflicts of interest and trust. The initiative suggests that Federal Council members should not attend hearings or access documents, a move supported by legal experts as necessary for effective parliamentary oversight. The Federal Council will respond to these proposals later, but parliamentary approval for the changes is anticipated.
On March 19, 2025, the Swiss House of Representatives approved motions from the Parliamentary Inquiry Commission aimed at enhancing banking oversight following the Credit Suisse crisis. The reforms include easing capital requirements for systemically important banks and strengthening the enforcement powers of the Swiss Financial Market Supervisory Authority. This legislative action reflects a commitment to bolster financial stability and prevent future banking failures in Switzerland.
Karin Keller-Sutter
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