Swiss Regulators Accused of Pushing UBS Out of the Country

Swiss Regulators Accused of Pushing UBS Out of the Country

Switzerland’s government, central bank, and financial regulator are under fire: Cevian co-founder Lars Förberg accuses them of trying to drive UBS out of the country. Meanwhile, UBS executives have reportedly held talks in the US about a potential strategic shift.

«The Federal Council, the SNB, and Finma are full of smart people. They are well aware that the proposed extreme capital requirements would compel UBS to leave. They just don’t want to say it out loud,» Lars Förberg told the «NZZ am Sonntag» (paywalled).

Skin in the Game

Förberg’s attack is not without self-interest: Cevian is one of UBS’s investors. He argues that the proposed regulations squander UBS’s strong position.

To remain competitive, the bank’s only option would be to switch regulators – in other words, to leave Switzerland. Ensuring competitiveness, he stresses, is the duty of every board of directors.

Capital Rules Like Tariffs

Cevian has calculated the cost of the tougher capital rules. The conclusion: the additional requirements would lead to annual capital costs of $6.5 billion, equivalent to 20 percent of UBS’s total costs.

Förberg likens the measures to tariffs: «Unlike, say, the 39 percent US tariffs on Swiss goods, these rules target UBS alone, as the only bank in the world affected. That massively undermines its competitiveness. We all complain about US tariffs, yet at the same time we’re shooting ourselves in the foot by deliberately crippling our biggest bank’s global competitiveness.»

Political Pushback Fails

Just last Monday, Switzerland’s lower house rejected a motion that would have delayed debate on stricter capital rules.

That would have helped UBS in the short term by sparing it from having to cut dividends and buybacks.

Not Against Stronger Oversight

Förberg, who has also invested in Baloise, already voiced his concerns in February about a drastic tightening of capital requirements, as reported by finews.ch.

But he insists he is not opposed to stronger banking oversight in Switzerland as such.

UBS Executives Explore US Options

Meanwhile, the «New York Post» reported that UBS leaders met with officials in Donald Trump’s administration. The topic: how to counter Switzerland’s tougher capital requirements, possibly through a strategic shift.

Options reportedly under discussion include acquiring a US bank or pursuing a merger, according to unidentified sources cited by the newspaper.