An election poster for lead candidate of the Swiss People’s Party, Christoph Blocher. Photo: Getty
UBS is too big a risk for Switzerland to bear alone and the bank should be divided into a domestically-focused unit and one centred on the US, according to former government minister and populist leader Christoph Blocher.
Shareholders can get one share in each entity, Blocher said in an interview published in Sonntagszeitung, saying “technically it’s no problem.” He said the issue is the risk to the state which is hard to shoulder, and “therefore the bank has to be broken up.”
UBS, one of the world’s largest wealth mangers, is locked in a battle with the Swiss political establishment over the government’s proposal to drastically raise its capital requirements, a consequence of its enlarged size following the takeover of Credit Suisse in 2023.
The US is a major source of revenue for UBS and the bank’s leadership is focusing on the country to improve profitability in the coming years.
The bank has also considered moving its headquarters out of Switzerland to evade the oncoming capital regulations, Bloomberg has reported.
Blocher (85) pushed the Swiss People’s Party, or SVP, strongly to the right and helped cement its place as the largest parliamentary party, and remains an influential voice in national politics.
The government’s current approach to regulation, which entails demanding as much as $26 billion in extra capital for the bank, is misguided, Blocher said, and doesn’t deal with the issue of UBS being “Too Big to Fail.”
He cited differences in the way American and Swiss banks operate. In the US, it is focused more on investment banking compared with Swiss lenders’ tradition to “invest their savers’ money safely and responsibly,” Blocher said.
In its efforts to weaken the government’s proposals as they make their way through parliament over the next couple of years, UBS will need support from SVP politicians. The SVP caucus leader, Thomas Aeschi, has already called on the government to change course in its approach to regulation.
The UBS leadership has been trying to convince the Swiss government to water down planned changes to regulation that could impose as much as $26bn in fresh capital requirements on the bank, and even reportedly held talks with US Treasury Secretary Scott Bessent about a potential relocation of headquarters.
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