UBS Leaving Home Would Be More Expensive, Swiss Minister Says
(Bloomberg) — Swiss Finance Minister Karin Keller-Sutter downplayed a suggestion that UBS Group AG could quit Switzerland to avoid stricter capital rules there, saying such a move would be more expensive than to stay.
“Leaving Switzerland would be far more expensive and legally complex,” Keller-Sutter said in an interview with Schweiz am Wochenende, when asked if she wanted to drive UBS out of Switzerland. “It would also cease to be a Swiss bank. Its business model, however, is based on Switzerland, on Swissness, on the rule of law, and on political stability,” the newspaper cited her as saying on Saturday.
Her comments follow a vote earlier this week by a majority of the upper house of Switzerland’s parliament endorsing a plan that would force UBS — the country’s largest lender — to hold more equity capital to back its foreign subsidiaries. The firm has estimated that this would require it to hold an extra $16 billion in CET1 capital.
UBS argues the capital reform would render it uncompetitive against global peers and pledged to press on with its fight against the planned measure.
UBS has revived discussions about ways to move the bank out from under Swiss regulators, including through a combination with a foreign bank, according to a report on Thursday from Semafor, which didn’t provide further details on potential talks.
The matter will now move to the Swiss lower house and a final outcome is unlikely to be known before some time next year.
“UBS certainly doesn’t have to leave Switzerland. Many analysts and specialists agree that the requirements are reasonable and easily manageable for UBS,” Keller-Sutter told Schweiz am Wochenende. “The capital inflows experienced by private banks during the conflicts in the Middle East clearly demonstrate the confidence in Switzerland as a business location,” she added.
Speaking in a separate interview with public broadcaster SRF, Swiss National Bank President Martin Schlegel struck a similar tone.
“Ultimately, the choice of headquarters is a decision for UBS,” he said in an interview broadcast Saturday. “Of course, it’s a large bank and brings benefits to Switzerland. But Switzerland, of course, also brings benefits to UBS.”
–With assistance from Zoe Schneeweiss.
(Updates with SNB president in final two paragraphs)
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