Claude Baumann: «Swiss Bankers Cry Foul»
What was meant to be a lesson learned from the Credit Suisse debacle is turning into a speed bump for Switzerland’s international competitiveness – especially for the globally focused UBS, writes finews.asia founder Claude Baumann.
Instead of fixing the system’s real weak spots, the Swiss Federal Council has inflated its reform package since April 2024, piling six additional rules onto the original 22, for a total of 28 new requirements.
As Swiss banking insiders put it on Friday afternoon, a single, self-inflicted bank failure has morphed into a regulatory tsunami that hits every institution, whether it is a universal bank, a private bank, or a regional lender.
Independence at Risk
«Rather than addressing specific flaws, the Federal Council has produced an overloaded package. The proposed capital rules put UBS – the last Swiss megabank – at a clear disadvantage against its international rivals. That threatens its independence, undermines key business lines and hampers strategic growth,» said Christian Bretscher, CEO of the Zurich Banking Association.
No International Benchmark
The most glaring example is the further-toughened capital requirements for UBS. They do not follow any global standard, exceed those of other financial centres by a wide margin, and punish the very bank that, after taking over Credit Suisse (CS), forms the backbone of Switzerland’s financial system and projects Swiss banking prowess worldwide.
Even after the Credit Suisse crisis, effectiveness and proportionality must remain the guiding principles. Proportionality means that differences in size, risk profile, legal form, and business model must be reflected in future regulation – a point the Swiss Bankers Association (SBA) also underlined on Friday.
While centres such as Singapore, Dubai, London, and New York are actively loosening rules to stay agile, Switzerland is tying itself down with ever-thicker red tape.
Consequences Are Obvious
- Costlier loans, slower growth, and higher equity quotas drive up capital costs and shrink lending to businesses and households.
- Location disadvantage – global wealth gravitates to jurisdictions with predictable, internationally comparable frameworks.
- Jobs and innovation at risk – a weakened banking sector means less investment in digital services, sustainability projects, and fintech partnerships.
Call for Restraint
Switzerland has long thrived on regulation that is both effective and measured. Precisely now, amid geopolitical tension and capital flows shifting to nimbler markets, prudence is needed.
Instead, an overloaded rulebook threatens the pillars of Swiss success: diversity, stability, and global appeal.
Parliament Must Course-Correct
If the government is serious about fostering growth and innovation, it must rethink this path. Smart, proportionate rules strengthen the marketplace; over-regulation weakens it. Parliament, which will ultimately chart the course, needs to recognise this.
The SBA, therefore, rightly expects lawmakers to slim down the proposals, align them with international standards, and ensure that Zurich, Geneva, and Lugano continue to play in the same league as Singapore, Dubai, London, and New York – rather than slipping to the sidelines.
