The Swiss government's proposal that UBS may need to secure up to $27 billion to cover potential losses and safeguard taxpayers from bailing out a major bank has sparked a contentious debate. UBS chairman Colm Kelleher expressed serious concern about the discussions, arguing that additional capital requirements could harm the bank and Switzerland's global financial reputation.
Kelleher emphasized UBS's robust financial position, stating that the bank is well-capitalized and capable of absorbing significant losses. He criticized the notion that increased capital requirements would address underlying business model issues, citing the case of Credit Suisse's recent struggles.
The proposed regulatory measures have led to a decline in UBS's stock value, reflecting investors' concerns about the impact on shareholder returns. Analysts suggest that heightened capital requirements could limit the bank's ability to return capital to shareholders or pursue earnings growth.
Despite the challenges, Kelleher reaffirmed the strategic benefits of UBS's acquisition of Credit Suisse, particularly in expanding its wealth management business. He stressed the importance of maintaining a level playing field in regulatory policies to sustain UBS's competitive edge in the global financial market.
Additionally, Kelleher defended UBS CEO Sergio Ermotti's compensation, stating that Ermotti has delivered results despite facing significant challenges in the financial services industry. Ermotti's pay package, although criticized by some shareholders, reflects his leadership in navigating the complexities of the banking sector.
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