HomeFinance NewsFinanceSwiss Bank Secret Exposed: UBS's Wall Street Domination Under Threat!

Swiss Bank Secret Exposed: UBS’s Wall Street Domination Under Threat!


‘Lose-lose situation’: New Swiss bank laws could derail UBS’ challenge to Wall Street giants


The Swiss government has proposed 22 measures to tighten controls on banks considered “too big to fail,” especially UBS, whose balance sheet now exceeds Switzerland’s annual GDP.

This follows the emergency rescue of Credit Suisse by UBS a year ago, highlighting concerns about the banking sector’s resilience.

Financial expert Beat Wittmann argues that these new regulations put UBS in a “lose-lose” situation.

While they aim to prevent financial disasters like Credit Suisse’s collapse, they may hinder UBS’s growth and competitiveness compared to Wall Street giants with similar balance sheets but higher valuations.

Wittmann believes that prioritizing regulatory reform over increasing capital requirements is crucial for UBS to unlock its full potential.

He argues that Switzerland’s regulatory framework should align with international standards in places like Frankfurt, London, and New York.

The government’s plan to give more authority to the financial regulator, impose capital surcharges, and strengthen subsidiaries’ financial positions falls short of addressing these concerns, according to Wittmann.

He stresses that policymakers lack sufficient expertise in financial markets and have failed to implement existing regulations adequately.

Wittmann’s analysis suggests that UBS needs a more competitive regulatory environment to thrive.

The government’s current proposals may not provide the necessary support and could leave UBS lagging behind global players.

The Swiss economy and taxpayers could also suffer as a result of insufficient regulation and enforcement, as highlighted by the Credit Suisse collapse.

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    “The UBS balance sheet of around $1.7 trillion is now double Switzerland’s annual GDP, prompting enhanced scrutiny of the protections around the Swiss banking sector and the broader economy.”


    “Switzerland’s tough new banking regulations create a “lose-lose situation” for UBS and may limit its potential to challenge Wall Street giants, according to Beat Wittmann, partner at Zurich-based Porta Advisors.”

    “He argued that regulatory reform should be prioritized over tightening the screws on the country’s largest banks, if UBS is to capitalize on its newfound scale and finally challenge the likes of Goldman Sachs, JPMorgan, Citigroup and Morgan Stanley — which have similarly sized balance sheets, but trade at s much higher valuation.”

    “In order for UBS to optimize its potential, Wittmann argued that the Swiss regulatory regime should come into line with that in Frankfurt, London and New York, but said that the Wednesday report showed “no will to engage in any relevant reforms” that would protect the Swiss economy and taxpayers, but enable UBS to “catch up to global players and U.S. valuations.”

    “The track record of the policymakers in Switzerland is that we had three global systemically relevant banks, and we have now one left, and these cases were the direct result of insufficient regulation and the enforcement of the regulation,” he said.”

    “”FINMA had all the legal backdrop, the instruments in place to address the situation but they didn’t apply it — that’s the point — and now we talk about fines, and that sounds like pennywise and pound foolish to me.””

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