UBS Group AG Chief Executive Sergio Ermotti has criticized recent regulatory reforms in Switzerland, stating they go too far and threaten the competitiveness of the country's financial sector. The comments come as global investors reassess risk exposure to Swiss assets.
- UBS CEO Sergio Ermotti criticized Swiss banking reforms as excessive and destabilizing.
- Reforms include a systemic risk contribution fee potentially costing top banks CHF 350 million annually.
- UBS maintains a Tier 1 capital ratio of 16.2% and liquidity coverage ratio above 140%.
- Swiss franc fell 0.8% to 0.92 EUR/CHF after Ermotti’s remarks.
- SWX-listed UBS shares declined 1.7% amid market uncertainty.
- Regulators may face pressure to revise implementation timelines due to institutional pushback.
Sergio Ermotti, CEO of UBS Group AG, has voiced strong opposition to new banking regulations introduced by Swiss authorities, cautioning that the measures could undermine the resilience and global standing of the nation’s financial system. Speaking at a private investor forum in Zurich, Ermotti emphasized that proposed capital requirements and liquidity rules—particularly those affecting large universal banks—would impose disproportionate costs without meaningful safety benefits. He noted that UBS already maintains a Tier 1 capital ratio of 16.2% and liquidity coverage ratio above 140%, exceeding Basel III standards. The reforms, part of a broader overhaul announced in late 2025, include stricter stress testing protocols, increased reporting frequency for systemic institutions, and the introduction of a bank-specific “systemic risk contribution fee” that could cost top lenders up to CHF 350 million annually. Ermotti argued these changes would not only increase operational burdens but also deter long-term investment in Swiss-based financial hubs. The proposed fees are estimated to affect around 12 major financial institutions operating across the country. Market reactions were immediate: UBS shares dipped 1.7% on the SWX exchange following the remarks, while the Swiss franc (CHF) weakened against the euro, falling 0.8% to 0.92 EUR/CHF. Swiss equity indices showed marginal declines, with the SMI dropping 0.5%. Analysts suggest that Ermotti’s open criticism may prompt regulators to reconsider the timing and scope of implementation, particularly given UBS’s pivotal role in maintaining liquidity across European markets. The broader implications extend beyond domestic concerns. As one of the world’s largest wealth managers, UBS’s stance signals growing unease among global financial leaders about regulatory overreach. With cross-border transactions and asset management heavily reliant on Swiss infrastructure, the potential for capital flight or reduced foreign participation looms if reforms are perceived as punitive.