ZURICH, May 13 (Reuters) – On Monday, UBS CEO Sergio Ermotti dismissed criticism that the bank had outgrown Switzerland and required higher capital reserves.
Ermotti, who was brought back to UBS last year to lead the process of absorbing Credit Suisse after an emergency rescue, said he agreed with most of the government’s recent proposals to make Swiss banking safer but not plans to make UBS hold more capital.
“When you talk about the only areas where we believe it’s appropriate not to overshoot is the areas around capital,” he told Reuters in an interview in Zurich.
He said that through its acquisition of Credit Suisse, UBS was already having to put aside $20 billion extra in capital.
UBS will reinvest part of $13 billion in planned cost savings on making the bank’s processes and businesses stronger following the takeover of Credit Suisse, Ermotti also said.
Ermotti highlighted the need for Switzerland to avoid excessive capital demands to ensure a favorable business environment. He stressed the importance of regulations that strike a balance between stability and growth. The CEO emphasized the role of financial institutions in driving economic prosperity while adhering to prudent risk management practices.
In conclusion, Ermotti remarks underscore the delicate balance required in regulating Switzerland’s financial sector. He advocated for policies that promote stability without stifling innovation. By adopting a prudent approach to capital demands, Switzerland can maintain its reputation as a global financial hub while fostering sustainable economic growth.
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