Negativity over interest rates from UBS chairman

Axel Weber, Chairman of the Board of Directors of UBS, gave his views in a newspaper interview Keystone

Former president of the German Federal Bank and now chairman of UBS,  Axel Weber has revealed his concerns over negative interest rates in Switzerland and spoken about the ongoing cultural shift at the bank in an interview with a Swiss newspaper.

On Saturday the Neue Zürcher Zeitung published Weber’s misgivings on the negative interest rates set by the Swiss National Bank back in January, the same month the Swiss franc was released from its peg to the euro.

“For company clients and institutional investors with very large cash reserves we have introduced individual rates,” said Weber, before adding that they had no plans to pass on the negative rates to small investors.

His primary concern was that it could create “perverse incentives” for savers and pension funds.

 “The low, sometimes even negative interest rates drive them to riskier assets,” Weber told the paper, summing up that we are now in a situation where everything has been “turned on its head”.

There was more than just criticism however. He supported the decision to unpeg the Swiss franc from the euro as the cost of maintaining the currency level had become “too high”.

“Europe has to solve its structural problems,” he said, “then the pressure on the franc will diminish”.

Regarding a cultural shift within the bank on compliance, Weber said they have made many changes to ensure all parts of the business are playing by the rules, but the process was not entirely completed yet.

He also commented he was a resolute advocate of the Automatic Exchange of Information. “Its introduction is inevitable, and what is inevitable should be actively approached.”