One year after the CS rescue, UBS is feeling more confident than ever. However, the bank is facing potential limitations due to calls from parliament for stricter capital requirements. This wave of regulation is beginning to roll in.
In recent news, the revelation of Sergio Ermotti’s salary of over 14 million francs for nine months sparked controversy among parliamentarians. While some called it excessive, UBS remained undeterred and announced share buybacks worth up to two billion francs. The timing of these announcements coincided with the upcoming debate on future rules for systemically important big banks, with the Federal Council expected to release a report on the matter soon.
While UBS is confident in its growth plans, it must also navigate regulatory challenges imposed by politicians. The primary goal of the upcoming reform is to ensure that crisis plans are in place and can be effectively implemented in times of need. Additionally, measures to prevent future banking crises, such as higher equity requirements, are being considered. While UBS is resistant to significantly higher equity ratios, there is growing pressure, particularly from the left, to implement stricter regulations.
As discussions around banking regulation continue, UBS faces the challenge of balancing capital requirements with profitability and competitiveness. The outcome of these debates will shape the future growth and stability of the financial industry in Switzerland.
