UBS's head believes the bank is not too big to fail. But in the case of a rescue, he has clear ideas about how things should go down.
Sergio Ermotti believes UBS can be two things at the same time. It is already the undisputed center of Switzerland's financial center. Yet it is also not so large that it is apt to take the banking hub, and the domestic economy, down should it collapse. According to him, it is currently one of the safest system-relevant global institutions in the world, he told attendees at a Swiss Risk Association event which the news service «Reuters» attended.
In the unlikely case that things go wrong, the bank has enough of a cushion before a resolution has to even be considered and it is very improbable that taxpayers will ever bear losses, the news agency cited him saying.
Not Swiss
Should something happen, Ermotti indicates he would prefer a private buyer as a solution. «Of course, this would likely entail an international buyer.», Reuters reported Ermotti saying. UBS would not collapse but it would also no longer be Swiss.
The statements are likely to prompt controversy domestically, given the speculation surrounding Credit Suisse before UBS's government-prompted rescue in March. At the time, there were discussions over its possible sale to a foreign buyer, including speculation that Blackrock, the world's largest asset manager, was potentially interested.
Digital Bank Runs
Ermotti also looked overseas when it came to bank regulation. He believes that Switzerland «should consider a more explicit» set of senior management responsibilities such as those in the UK. He also hinted at the difficulties seen early this year in the US related to Silicon Valley Bank and closer to him, with Credit Suisse, as Reuters reported him saying that the liquidity framework internationally needed to be adjusted for the era of digital banking.
