Sergio Ermotti: Switzerland Doesn't Need Two Large Banks

For Sergio Ermotti, diversification of the Swiss financial center is more important than maintaining two large banks.

Sergio Ermotti's statements on the Swiss financial market carry heft. As the former head of UBS and current chairman of reinsurer Swiss Re, he has a great deal of perspective in this regard. In an interview with the «NZZ am Sonntag,» (in German, paywall) he made it clear that the economic benefit of two major Swiss banks is limited.

Furthermore, it is an open question on whether Switzerland needs 24 cantonal banks. The cantonal banks, Raiffeisen cooperative banks, and regional banks have grown enormously in recent years. For Ermotti, the strength of the financial center is diversification.

Tough Decisions Face Credit Suisse

While it is nice that Switzerland has two successful big banks, the domestic market is not dependent on them. Their market shares in lending and mortgages are no larger than those of other banks, Ermotti said.

The challenging environment for large banks demands tough decisions, according to Ermotti. To survive as an independent bank, Credit Suisse should focus on its strengths and introduce the necessary reforms, giving it a good chance to survive as such.

Ermotti declined to comment on whether he had been approached for the CEO position at Credit Suisse, which Ulrich Koerner took over at the end of July from Thomas Gottstein.