The CEO believes that the new UBS is misunderstood now, but that it is ultimately a force for good. Sergio Ermotti seems to enjoy science fiction and is in top rhetorical form at the end of the year.
Sergio Ermotti (pictured below) will not be talked out of it: the Swiss financial center needs a much bigger bank to stave off international competition – a bigger bank such as UBS combined with Credit Suisse (CS). And the combination will be worth more than the sum of its parts, the boss of the largest Swiss bank is certain of this.
Created by Journalists
He has once again put this on record with the «NZZ» (paid article, only in German), when the manager was interviewed along with Swissmem President Martin Hirzel. «The combination of the two banks will allow us to offer even better services», Ermotti told the paper. UBS takes the best of both (banks), and will also intensify the engagement in trade financing. «This is a win-win scenario; one plus one can also be more than two.»
Whoever dares to doubt his blessings upon the new megabank must be up to something, says the UBS boss: «The term «monster bank» was coined by journalists who are looking for lots of clicks. In my opinion, this concept has nothing to do with what we are as a bank, and what we are for Switzerland», explained Ticino-born Ermotti, who climbed the ranks to become UBS CEO twice.
It is perhaps appropriate that the «NZZ» was the first media outlet to call UBS a monster bank.
(Image: UBS)
Is This Just Populism?
Ermotti brought quite an interesting analogy into play. «Do you know «The Iron Giant», the film about the Iron Giant from space? If we are a strange entity, then we are the Iron Giant.» A creature that was seen as a threat at first – until people understood that he was a force for good.
The question of whether this positive force does not need any more capital, however, seems to spark growing rage in the USB boss. «CS had enough capital», he pointed out, and: «It does not need even more expensive capital. Thinking that is just pure populism. More capital would cost the entire economy very dear.»
«Pure Masochism»
Ermotti continues to see the sale of CS, which on paper had sufficient capital but then went under anyway, as the best solution. «Liquidating a major bank even though there was a private solution available, just to confirm that it was «too big to fail» would have just been pure masochism», he claimed. The reputational loss for the financial center would have ended up being far greater.
At the time, however, no one knew the shock effects that this would have triggered, and many more jobs would have been lost for sure.
