A competitive landscape without Credit Suisse has to be carefully analyzed, especially in the national B2B sector, says Julius Baer CEO Philipp Rickenbacher. New regulations must be limited to systemically important banks.
The takeover of Credit Suisse by UBS has reverberated around the world, Julius Baer CEO Philipp Rickenbacher told an audience at the «Private Banking Day» event in Basel on Thursday.
That tiny Switzerland managed to contain the crisis and avert a «Lehman moment» on its own sends an important message and one the country needs to be more confident expressing. An expansion of the turmoil outside Swiss borders that could have had enormous consequences for the global economy was prevented, said Rickenbacher, who also chairs the Association of Swiss Asset and Wealth Management Banks (VAV).
Stronger Communication Abroad
When confronted with the serious risks of an imminent failure of a globally systemically important bank, Swiss authorities acted quickly, decisively, and correctly. The swift and independent solution proves Switzerland continues to be rock solid, Rickenbacher explained.
Still, «It's important that we communicate this more clearly and confidently to the broader general public abroad,» he said.
Ruthless Appraisal Needed
He called for a ruthless, open-ended review of events involving all relevant participants. Events surrounding the rescue caused an understandable stir, and the facts are complex and, urging restraint, said there is no need for political snap decisions.
Instead, the lay of the land has changed. This is especially true for the domestic B2B banking sector following the elimination of Credit Suisse as an independent bank and needs careful analysis. For private banks, it's clear any new regulations have to focus on systemically important banks and, in the last instance, state-supported banks.
One Bad Apple
Rickenbacher reminded his audience that of the 240 banks in Switzerland, only one, albeit a major one, ran into difficulties so there can be here can therefore be no question of a failure of the Swiss banking industry.
The annual event is organized by the Association of Swiss Private Banks (ASPB) and the Association of Swiss Asset and Wealth Management Banks (VAV). Thirty financial institutions managing collective assets of 2.4 trillion Swiss francs while employing over 28,000 staff, of which nearly 17,000 are Swiss-based, are affiliated with the organizations.
Finance Minister Sets Key Tasks
Federal Councillor and Finance Minister Karin Keller-Sutter commented on the consequences of global developments for the Swiss financial industry and its competitiveness. In her speech, she said banks have to fulfill three key tasks to maintain the competitiveness of the industry.
They include anticipating international trends, enduring financial stability, and integrating digital innovation into their operations.
