UBS Exit Would Also Mean a Loss of Trust

UBS Exit Would Also Mean a Loss of Trust

How would a potential relocation of UBS affect trust? Is Switzerland’s largest bank a systemic risk? Has the takeover of Credit Suisse created value? Here’s how entrepreneurs from various countries answer these questions.

The future of Switzerland’s last major bank, following the downfall of Credit Suisse, continues to be a topic of public concern.

UBS shareholders are keen to understand how the Swiss Federal Council’s proposed new regulation, which includes stricter capital requirements, will impact the bank’s valuation and, by extension, its stock price.

Taxpayers hope the measures will significantly reduce the likelihood of a future state bailout. For Swiss businesses, it is essential to continue relying on a knowledgeable and engaged banking partner in corporate finance.

Second Survey Tackles Sensitive Issues

The topic remains highly charged – likely the reason why the research institute Connect4B.net, led by CEO Stefan Lang, conducted a follow-up survey just over a month after releasing its previous results. This time, the focus shifted slightly.

The findings are based on interviews conducted in the second half of June with 800 entrepreneurs in Switzerland, Germany, Austria, the United Kingdom, and France – each with at least $3 million in freely investable business-derived assets.

Shake Confidence

A UBS relocation from Switzerland would be viewed very negatively at home: 70 percent of Swiss respondents stated that their trust in both the bank and in Switzerland as a leading hub for private banking (two aspects that could have been asked separately) would significantly decline.

Similarly strong concerns were registered in Germany and Austria. In contrast, the majority in the UK and France would not consider a UBS move problematic.

Potential Systemic Risk

A comparable pattern emerged when entrepreneurs were asked whether UBS poses a systemic risk to the Swiss or broader European financial system in times of crisis. More than half of the Swiss respondents consider the risk high or very high, whereas the assessment is less severe in the UK and France.

Higher Capital Requirements

Differences in opinion were also evident regarding the issue of capital requirements. In Switzerland and France, more than 50 percent of respondents support the Federal Council’s plan to increase capital buffers. In the UK, however, nearly half selected the «neutral» response option.

Credit Suisse Takeover: Minimal Perceived Value

Finally, Connect4B.net asked whether the government-orchestrated takeover of Credit Suisse by UBS had created value. The verdict was critical across all countries: fewer than 10 percent of respondents in any country saw significant synergies or clear added value from the acquisition.

The survey provides a snapshot of current sentiment among entrepreneurs, and it will be interesting to observe how this changes over time, whether through UBS’s operational performance or the influence of various lobbying efforts as the shape of future Swiss banking regulation takes form.