ZURICH, Jan 11 - Following the acquisition of Credit Suisse, former Swiss Finance Minister Ueli Maurer has raised alarm bells regarding UBS's substantial size and its implications for the Swiss economy. With a balance sheet totaling around $1.7 trillion, UBS's financial footprint is now twice the size of Switzerland's annual economic output, leading Maurer to argue that this situation necessitates the implementation of measures to mitigate risks for the enlarged bank.

In an interview with the Tages-Anzeiger, Maurer remarked, “If you look at the numbers alone and compare UBS with the Swiss economy, it is too big. Therefore, the risk must be reduced.” He emphasized that the failure of such a large institution could have dire consequences for the Swiss financial landscape, particularly given the absence of other local banks capable of absorbing the fallout. The implications of a potential nationalization of UBS could also have severe repercussions for public finances, according to experts cited in Reuters.

Maurer highlighted that the onus for risk reduction largely falls on the shoulders of the shareholders, who must exercise judicious governance through their choice of board members. “They must take responsibility, not the taxpayers in the end,” he stated. The former minister also pointed out that recent parliamentary reports had questioned his actions during the late stages of the Credit Suisse crisis in 2022.

In response to the fallout from Credit Suisse’s failure, the Swiss government outlined plans to enforce tougher capital requirements across UBS and the other three major banks in the country. While the specifics remain undisclosed, estimates suggest that UBS might need to maintain between $15 billion to $25 billion in additional capital reserves, a proposal that has already faced pushback from the banking giant.

Maurer warned that excessively high capital requirements could diminish the competitiveness of Swiss banks, potentially driving them to establish operations elsewhere. He reinforced the notion that a sizeable bank presents a locational advantage for Switzerland's many international corporations, but he reiterated the necessity of minimizing risks associated with such scale.

While UBS declined to comment on Maurer’s statements, its CEO, Sergio Ermotti, assured stakeholders that the bank possesses adequate capital to navigate potential challenges and expressed support for the government's regulatory improvements, provided they are “targeted and proportionate,” as noted in the interview following his remarks.