UBS CEO Pushes Back on Swiss Capital Rules Ahead of Parliamentary Vote
Ermotti says a full capital backing would hurt UBS returns as lawmakers weigh a compromise that could require $13 billion more in Tier 1 capital.
- Chief Executive Officer Sergio Ermotti warned lawmakers on Sunday against imposing excessively strict capital requirements on UBS, ahead of a decisive parliamentary vote scheduled for Wednesday.
- Following the 2023 Credit Suisse collapse, the Swiss government argues stricter capital rules are necessary to protect taxpayers and has proposed requiring UBS to back foreign units with 100% Common Equity Tier 1 capital.
- The AT1 compromise would require UBS to amass $13 billion in additional capital, which Ermotti described as "bearable," while the government's full-backing proposal demands an extra $20 billion.
- Ermotti reiterated that the Swiss National Bank and FINMA deserve blame for the Credit Suisse demise, stating that demanding 90% or 100% capital backing would leave the bank with "two black eyes and a broken nose."
- UBS Chairman Colm Kelleher warned the bank must carefully consider its future in Switzerland if new rules prevent it from competing, even as UBS expects to reach pre-takeover return on equity levels by year-end.
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Business Times
Live MintUBS CEO Ermotti warns against harsh capital rules ahead of vote
UBS chief executive Sergio Ermotti warned lawmakers against imposing excessively strict capital requirements on the Swiss bank in an interview published on Sunday (Sep 20), days before a key ... Read more at The Business Times.
UBS Head Ermotti Calls AT1 Capital Compromise Bearable, NZZ Says
(Bloomberg) -- UBS Group AG Chief Executive Officer Sergio Ermotti said a proposal by Swiss lawmakers for the bank’s future capital requirements is “bearable” but would still deal a blow to the lender, according to a newspaper interview.
On Wednesday, the Council of States will vote on how much capital UBS will have to hold in the future. For Grossbank, the capital issue marks a turning point. CEO Sergio Ermotti is all the more alarmed by the arguments with which the debate is being conducted. In a conversation with the NZZ, he tries to create clarity.
In an interview with the NZZ, the UBS CEO places a strong appeal to parliamentarians to be guided by the facts in the context of equity regulation. He reminds the Finma and the Swiss National Bank of their failings in the run-up to the sinking of Credit Suisse and breaks a lance for the instrument of the AT1 bonds.
Shortly before the Council of State vote on capital regulations, UBS CEO Sergio Ermotti is sounding the alarm. Overly high requirements would not only burden the bank, but also the customers and the Swiss business location. And he attacks the authorities.
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