UBS Must Face Reform, Says Finance Minister
Swiss Finance Minister Karin Keller-Sutter has urged swift action on banking reforms, cautioning that delays in regulating systemically important institutions like UBS could expose taxpayers to future bailouts.
In an interview with Swiss Sunday paper «SonntagsBlick,» (in German only)Karin Keller-Sutter said she hoped lawmakers would remember the principles of economic liberalism and not obstruct reforms crucial to financial stability.
Her comments come ahead of a planned Federal Council response to a parliamentary motion on UBS’s capital requirements, scheduled after the summer break.
The motion, backed by her FDP party colleague Beat Walti, argues that UBS's capitalization must be considered within the broader framework of large bank regulation, rather than as an isolated issue.
Parliament Must Own the Risk Question
The Swiss Finance Minister stressed that Parliament, not just the executive branch, must take responsibility when it comes to regulating the capital buffers of UBS’s international subsidiaries. This issue was a focal point in the Federal Council’s recent report on banking stability and was also addressed by the parliamentary investigation commission (PUK).
Originally intended to be handled through ordinance, the full capitalization of UBS’s foreign arms is now shaping into a political issue. «It’s essential to clarify who bears the risk – the bank and its shareholders, or the taxpayer,» she said.
Facing Industry Pressure
Keller-Sutter acknowledged the strong lobbying efforts aimed at weakening reform proposals. «That’s always the case,» she said. «But I’m frequently reminded by citizens that regulation must ensure banks don’t rely on taxpayer money when things go wrong.»
She reiterated that UBS, as a systemically important institution, would never be allowed to fail without control. «That’s simply the reality, because the economic fallout would be too great. UBS effectively benefits from an implicit state guarantee.»
Dialogue with Trump
On international relations, Keller-Sutter recounted a productive conversation with US President Donald Trump, following recent tariff announcements. «I clearly found a way to connect with him,» she said in the interview, adding that Trump expressed strong interest in Switzerland and posed many questions.
She plans to travel to the US in October, though no meeting with Trump is currently on the agenda.
