UBS CEO Sergio Ermotti criticized the Swiss government for its handling of the tax dispute in France. The Swiss National Bank also featured prominently in his remarks.
He wasn't trying to make new friends in the Swiss capital of Bern for sure: Sergio Ermotti, the boss of Switzerland’s largest bank, said he had wished for more support from the government in the case of the tax dispute in neighboring France.
Ermotti's comments are noteworthy because they highlight just how treacherous the Swiss bank considers the French case. They also undermine the Swiss-born Ermotti's efforts in recent years to evolve from an investment banker-CEO into a business statesman by commenting on Swiss political matters of economic and business relevance, like immigration.
Tantamount to Scandal
The way France had handled the case of UBS amounted to a scandal, he told Swiss Sunday paper «Sonntagszeitung» (behind paywall, in German). Ermotti is primarily miffed about the statement of the former French finance minister who said during the investigation he wanted the bank to be convicted.
The action amounted to a violation of the separation of powers. The Swiss government however opted not to react in public, which Ermotti found incomprehensible. He also makes clear that the issue of banking with untaxed assets had been blown up beyond all proportion at least in the case of UBS.
SNB: Out of Ammo?
The introduction of the automatic exchange of information was correct as such, Ermotti said, but launched too swiftly and without making sure that the country received something in return – for example through better market access or legal protection for clients, members of staff or banks.
Ermotti also criticized the Swiss National Bank, the country’s central bank, for mentioning the banks’ growth as a risk in its stability report. He said that the negative interest rates and the sheer size of the bank’s assets were far greater risks.
According to Ermotti, the bank was hardly able to reduce its balance again because it would incur huge losses and because such measures would endanger the Swiss export industry (by boosting the Swiss franc). He added that Switzerland had few option to act in a potential crisis, unlike the U.S. which currently was raising interest rates.
