Head of UBS Warns Against Overly Burdensome Capital Requirements: Bank Considering Relocation amid Regulatory Debate

The head of a major bank has warned politicians against imposing excessive capital requirements. In an interview conducted in 2017, CEO Sergio Ermotti discussed the decision of a European bank to relocate its headquarters for regulatory reasons. He emphasized the importance of regulations that protect shareholders and customers but warned against reaching a point where competitiveness is compromised.

The topic remains pertinent today, as the Federal Council is pushing for increased capital requirements for UBS. The bank is resisting these changes, sparking debate about whether there is a threshold beyond which UBS might consider relocating its headquarters. While Ermotti and UBS Chairman Colm Kelleher have not indicated any plans to move, Ermotti’s past statements about not taking anything for granted continue to resonate.

In recent comments, Ermotti faced questions about whether UBS would consider moving its headquarters if regulatory challenges arose. He firmly stated that it was not his role to speculate on hypothetical scenarios. UBS considers its Swiss roots and presence to be central to its strategy, and the likelihood of relocation is considered low.

Despite resistance to the proposed regulations, UBS will still need to increase its equity capital due to existing rules. The debate revolves around the potential economic risk posed by the bank and the impact of these regulations on stability and progress in transitioning Credit Suisse into UBS’s operations under Ermotti’s leadership.