Oswald Gruebel, the former boss of UBS and Credit Suisse, is no supporter of the low-interest policy applied by central banks and expects the fallout to be rather dramatic.
«Politics has taken over power following the financial crisis,» Oswald Gruebel told «SonntagsBlick» newspaper (behind paywall). The state applied a tight corset making it impossible for banks to move.
Central bankers had told politicians that it was up to them to decide what happened with the economy, Gruebel said. Before the seismic shift, the risks were shared by thousands of banks. «Shareholders carried the risk. Today it is more and more up to the state to take the risk,» the veteran banker added.
Crash Will Come
«Every year, banks are losing hundreds of millions of francs due to negative interest rates they are forced to pay to the central banks.» Gruebel waved away the motion that raising rates would spark a recession because such contraction from time to time became necessary to cleanse established structures and to bring about renewal.
Gruebel expects a banking crash: «Central banks have passed the “point of no return”. It will end in a crash.»
State Ownership
Banks won't recover from the fallout, he added. «The will become a very grave thing. Afterwards, banks might all belong to the state,» Gruebel said. In the past, the star banker often was right with his analyses.
