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UBS is facing a significant political setback as it struggles to counter stricter capital requirements imposed by the Swiss government, which would mandate 100% capital coverage for its foreign subsidiaries. Despite intensive lobbying from CEO Sergio Ermotti and Chairman Colm Kelleher, the bank's efforts have not gained sufficient momentum against the support for these measures from FINMA and the Swiss National Bank. The legislative process is underway, with key figures to be published in June and a potential parliamentary vote by the end of 2027.
Neil Esho, Secretary General of the Basel Committee, has countered UBS's criticism of stricter Swiss capital regulations, asserting that claims of disadvantage are misleading. He emphasized that Swiss banks have more flexibility in capital recognition compared to other jurisdictions, supporting the Swiss government's requirement for UBS to hold additional capital. Esho noted that the Basel framework aims to ensure sufficient capital across banking groups, highlighting the importance of capital availability in legal entities, particularly for UBS's large US subsidiary.
FINMA has restructured its organization to enhance risk management and supervision, effective April 1, 2025. A new "Integrated Risk Expertise" division will consolidate expertise in liquidity, capital, and money laundering, while on-site inspections will increase. This reform aims to address criticisms following the Credit Suisse crisis and restore confidence in the Swiss financial sector.
The Swiss Financial Market Supervisory Authority (FINMA) is reorganizing to enhance its oversight capabilities following the Credit Suisse crisis. A new division for "Integrated Risk Expertise" will focus on in-depth supervision and on-site inspections, while the "Markets" and "Asset Management" divisions will merge to improve risk management. This restructuring aims to ensure more effective protection for financial market clients and the overall functioning of financial markets.
Swiss financial market regulator FINMA has restructured its organization to enhance supervision, particularly following UBS's acquisition of Credit Suisse. The changes include a new Chief Risk Officer role and a focus on integrated risk management to address challenges like liquidity, capital, and non-financial risks. Deputy CEO Birgit Rutishauser will leave by April 30 for a new career opportunity, a decision unrelated to the restructuring.
Birgit Rutishauser, deputy to Finma Director Stefan Walter and head of the insurance division, is leaving the financial markets supervisory authority after nine years for new professional challenges, with her last day on April 30. She served as acting director for six months following Urban Angehrn's resignation and received praise for her leadership during a challenging period. Finma also announced an organizational reorganization, creating a new cross-division for "integrated risk expertise" and merging the Markets and Asset Management divisions.
The Swiss Financial Market Supervisory Authority (FINMA) will restructure its organization on April 1, 2025, to enhance risk-based supervision and financial system integrity. A new division, "Integrated Risk Expertise," will centralize risk management functions, while the Asset Management and Markets divisions will merge to improve efficiency. Key appointments include Marianne Bourgoz Gorgé as head of the new division and Léonard Bôle overseeing the merged divisions, with a focus on addressing emerging challenges like non-financial risks and cybercrime.
Stefan Walter, Switzerland’s financial regulator known as “The Sheriff,” is challenging the banking elite, particularly UBS, by advocating for stringent capital requirements following the Credit Suisse collapse. His push could impose up to $25 billion in new capital demands on UBS, which argues this is an overreaction. Walter's assertive approach is disrupting the previously cozy relationship between Swiss banks and their regulator.
Stefan Walter, Switzerland's financial regulator, is pushing for stricter capital requirements for UBS, potentially increasing its obligations by $25 billion. His assertive approach aims to disrupt the previously cozy relationship between banks and regulators, reflecting a shift in public appetite for enhanced scrutiny following the Credit Suisse crisis. Walter's leadership has led to significant penalties against several financial firms, signaling a new era of accountability in Swiss finance.
UBS is contemplating relocating its headquarters due to proposed capital demands of 25 billion francs, which could significantly impact its profitability and competitive edge. CEO Sergio Ermotti warns that increased requirements may lead to operational costs of up to $3 billion annually, risking customer trust and employment in Switzerland. As discussions continue, the Finance Minister emphasizes the need for a collaborative resolution to maintain UBS's presence and stability in the Swiss financial landscape.
Stefan Walter
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