UBS CEO Sergio Ermotti urged authorities to enhance their ability to detect issues within banks, emphasizing the need for reform in the Swiss banking sector following the collapse of Credit Suisse in 2023.
UBS has become a focal point in discussions on new regulations due to its increased importance following the acquisition of Credit Suisse. The debate over how much additional capital UBS should maintain to ensure its robustness is contentious. The bank argues that imposing excessive capital requirements could disadvantage both UBS and the Swiss financial center. In a memo to staff, Ermotti called on regulators to approach the establishment of new rules with caution.
He expressed support for key elements of the government's reform proposals and stressed the importance of early detection of potential vulnerabilities. He suggested that public stress tests, similar to those implemented in the U.S. and elsewhere, could more effectively identify the strengths and weaknesses of financial institutions.
Moreover, he endorsed measures aimed at canceling or reclaiming compensation from individuals who have acted negligently. Speaking at the European Financials Conference organized by Morgan Stanley, Ermotti indicated that he expects greater clarity on capital requirements to emerge in May, though he acknowledged that UBS does not control the political process.