Vontobel warns that Switzerland must avoid ‘over-regulation’

Christel Rendu de Lint says the renewed focus on currency and jurisdictional diversification is supporting inflows into Switzerland. Keystone / Ennio Leanza

Vontobel has warned that Switzerland must avoid “over-regulation” as the government prepares to unveil sweeping reforms to its too-big-to-fail regime in the wake of Credit Suisse’s collapse.

Co-chief executive Christel Rendu de Lint, who leads one of Switzerland’s larger listed banks and asset managers with CHF241 billion ($311 billion) in assets under management, said safeguarding the country’s competitiveness was “everyone’s responsibility” in an interview with the FT. This includes regulators and politicians as well as the corporate sector, she said.

Her remarks come as Bern finalises tougher capital and oversight rules under a revamped “Too Big To Fail” regime following Credit Suisse’s collapse in 2023. UBS subsequently agreed to buy Credit Suisse in a state-sponsored takeover, leaving Switzerland with only one large systemically important bank.

The government is expected in April or May to publish a formal report setting out its recommendations after a consultation on requiring UBS to fully capitalise its foreign subsidiaries, potentially increasing its capital needs. Once published, the proposal will move to parliament for debate, opening what could be a lengthy legislative process.

“Over-regulation is not a good thing,” Rendu de Lint said, though she stopped short of directly criticising the proposed measures, adding she would reserve judgment until “the ink is dry”. Looser rules are “not always better” either, she said. 

The debate over the stability of the financial sector goes far beyond technical capital ratios. Switzerland is deciding how much risk the country is willing to tolerate from a global banking champion whose balance sheet dwarfs its domestic economy – and how to balance that against the benefits UBS brings as a national and international powerhouse.

Bern is moving to tighten its banking framework even as the US has signalled deregulation under President Donald Trump and the EU and UK have softened or delayed parts of Basel III, the capital standards agreed by a committee of global regulators based in the Swiss city.

Officials have indicated UBS may need to fully capitalise certain foreign subsidiaries, a move analysts estimate could increase its capital needs by as much as $26 billion. The reform package would also expand the powers of the regulator, FINMA, granting it stronger early intervention tools and broader authority to hold senior executives accountable.

Unintended consequences

While Vontobel is not directly targeted by the proposed capital increases aimed at globally systemic banks, Rendu de Lint acknowledged that regulatory shifts inevitably affect the broader ecosystem. “It needs to be looked at in a global context,” she said.

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Some Swiss lawmakers have similarly warned that unintended consequences from the reform package could ripple through the wider financial sector, particularly at a time when smaller wealth managers and private banks are already under pressure from rising compliance costs and consolidation.

Rendu de Lint said clients were once again putting currency and geographic diversification “front page” amid geopolitical tensions, volatility and extreme concentration in US equity markets, where gains have been dominated by a handful of large technology stocks linked to AI.

Calling the Swiss franc “a reliable safe haven”, she questioned whether investors could still assume the US dollar would rally in a major crisis.

“If you had a crisis like 2008, would the dollar rally, or would it sell off? Is it going to be a protector – or are you doubling down on risk?” she said, noting that during a recent bout of market stress “the dollar sold off”.

She said the renewed focus on currency and jurisdictional diversification was supporting inflows into Switzerland despite growing competition from financial centres such as Singapore and Dubai.

Headwinds

At the same time, she acknowledged that Vontobel – like much of the active asset management industry – has faced headwinds in recent years. Institutional flows had been weaker as investors pulled back from active strategies following the sharp rise in interest rates in 2022.

Vontobel recorded net institutional outflows of about CHF1.6 billion in 2025, reflecting what Rendu de Lint called a “long winter” for active managers, but this was offset by strong private client inflows of roughly CHF5.8 billion, helping lift total assets under management to about CHF241 billion and generating CHF4.2 billion in net new money overall.

She said 2025 marked the first year of renewed inflows into active fixed income. “That brutal period is over.”

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