ZURICH (Reuters) – UBS could be seen as too big in Switzerland after its takeover of Credit Suisse, former Swiss Finance Minister Ueli Maurer said on Saturday, a move needed to reduce the bank's increased risk.
“If you look at the numbers alone and compare UBS with the Swiss economy, it's huge,” Maurer told the Tages-Anzeiger newspaper. “Therefore, the risk must be reduced.”
At around 1.7 trillion dollars, UBS's balance sheet is twice the size of Switzerland's economic output, giving the bank a unique weight in the economy.
If a bank fails, there are no domestic rivals left to absorb it, while the costs of nationalization could seriously damage public finances, experts have warned.
Mitigating risks was the responsibility of shareholders by selecting board members, Maurer said.
“They have to take responsibility, not the taxpayers in the end,” said Maurer, who left the post months before Credit Suisse collapsed in March 2023.
“Legal measures should be considered,” said Maurer, who defended himself after a recent parliamentary report raised questions about his actions as Credit Suisse's situation worsens at the end of 2022.
The Swiss government last year planned capital requirements for UBS and the other three major Swiss banks in a bid to make the financial sector stronger after the collapse of Credit Suisse.
Details of the exact capital requirements are yet to emerge, but it is possible that UBS could be made to hold $15 billion to $25 billion in additional capital it has encountered against the bank.
Maurer said that if capital requirements are too high, Swiss banks will no longer be competitive and may look to base themselves elsewhere.
“In a Swiss economy with many foreign countries, a big bank is a local advantage,” he said. But the risk must be minimized.
UBS has been approached for comment.