Capital requirements to be mandated on UBS under new banking regulations should be “reasonable,” as Switzerland seeks to achieve a new balance between the financial sector and taxpayers, Keller-Sutter said.
The Swiss are now considering how best to revamp banking regulations as they strive not to have another Credit Suisse experience in 2023 which saw takeover of the failed institution by UBS.
In an interview aired on Sunday, Keller-Sutter said UBS was now a very large bank in relative to the Swiss economy making it a special case.
“And so the appropriate protective and preventative measures have to be taken; that is liquidity, that is equity capital,” she told the national broadcaster SRF.
She agreed that UBS was already subject to some more onerous capital rules, including under the Basel III rules from January that are not being applied in the same way in every country.
In April, at the time when the Swiss government proposed new reforms, Keller-Sutter stated estimates according to which UBS still would need another $15bn-$25bn of capital were “plausible”.
Interviewed and asked whether the $25 billion figure was still relevant, Keller-Sutter said she could not confirm it. Lastly, she said what mattered was the total bundle of reforms.
“This has to be done in a proportionate, targeted manner,” she said, noting that Switzerland had to strike a balance between having a top financial centre and safeguarding the interests of taxpayers.
Responding to an upcoming parliamentary report on how the authorities dealt with the Credit Suisse turmoil, Keller-Sutter said the primary responsibility is with bank officials.
Regarding the chances of the incoming U.S. President Donald Trump in imposing high trade tariffs on other countries, Keller-Sutter was still pessimistic to weigh in.
“But of course if such tariffs did come about, it would be poison for world trade,” she said.
