ZURICH, April 11 (Reuters) – Switzerland’s major bank lobby said on Friday that the Swiss economy could face serious consequences if UBS is deported, exacerbating the risk of excessive regulations attacking banks.
Switzerland is developing stricter banking rules to make the industry stronger after Credit Suisse collapses. UBS has gained its old rivals, which has attracted attention to the potential economic risks raised by the expansion of banks.
UBS said it has no plans to leave, although people familiar with its thinking say it could become a takeover target if it is not properly blocked and has considered all scenarios, including mobile headquarters.
Credit Suisse’s takeover has made UBS the only large international bank in Switzerland, and the back and forth regulation on how to prevent another crisis centers on the additional capital the bank should hold.
UBS said it is capital-rich and excessive capital requirements will put competitors at a disadvantage, thus undermining the competitiveness of the Swiss financial sector.
The Swiss Bankers Association said last month that if the new regulations are too heavy, it may encourage UBS to withdraw.
In a report clarifying the benefits of banking to the Swiss economy, the SBA said the country needs to maintain an internationally competitive financial sector and address the cost of potential UBS departures.
“The potential relocation of the remaining big banks could have serious consequences … in the medium term,” the SBA said.
“This strategy, which no longer focuses on global business activities, is targeting the EU’s main regulatory and economic orientation, could be seriously disadvantageous to banking activities, especially in other growing regions of the world without any related advantages.”
The SBA said the decline in the Swiss financial sector could hurt economic output, employment, public finance and limit the opportunity for businesses to obtain capital.
The Swiss government will propose recommendations on new capital rules in early June. (Reported by Dave Graham and Oliver Hirt; Editor of Barbara Lewis)
