Switzerland’s Social Democrats propose shrinking UBS – Aargauer Zeitung

1 min


171
110 shares, 171 points

ZURICH (Reuters) – Switzerland’s Social Democratic Party has drawn up a proposal to shrink UBS assets after its takeover of Credit Suisse, the Aargauer Zeitung newspaper reported.

The combined bank will have a balance sheet of around 1.5 trillion Swiss francs – roughly double the size of the Swiss economy, posing enormous risks to the country especially as it enjoys an implicit state guarantee, party member and lawmaker Samira Marti told the paper.

The left-leaning Social Democratic Party, the second biggest party in the Swiss parliament, will propose an upper limit for the bank’s assets, namely that its assets should not exceed half of Switzerland’s GDP, which last year stood at 771 billion Swiss francs.

For the new UBS this would mean reducing its assets to a quarter of their current level.

“That would be a drastic reduction, but from the taxpayer’s point of view, it’s necessary,” the paper quoted Marti as saying.

An alternative would be imposing higher capital requirements if the bank’s assets rose above 50% of Swiss GDP.

Any part of UBS’s balance sheet above that threshold would require an equity ratio of 30% or more, Marti said of her party’s proposal. At present the Swiss parliament is discussing an equity requirement of 15%.

The government-orchestrated rescue of Credit Suisse has seen 209 billion francs in state and central bank support deployed, and caused concern in parliament which rejected the package in a symbolic vote.

“The aim is for UBS to become smaller,” Marti told the newspaper. “We have to make improvements so that banks are less vulnerable in a crisis.”

(Reporting by John Revill; Editing by Edwina Gibbs)

Source: KFGO


Like it? Share with your friends!

171
110 shares, 171 points

What's Your Reaction?

Cute Cute
26
Cute
Fun Fun
18
Fun
Hate Hate
13
Hate
Confused Confused
2
Confused
Fail Fail
21
Fail
Geeky Geeky
16
Geeky
Love Love
8
Love
OMG OMG
2
OMG
Choose A Format
Personality quiz
Series of questions that intends to reveal something about the personality
Trivia quiz
Series of questions with right and wrong answers that intends to check knowledge
Poll
Voting to make decisions or determine opinions
Story
Formatted Text with Embeds and Visuals
List
The Classic Internet Listicles
Countdown
The Classic Internet Countdowns
Open List
Submit your own item and vote up for the best submission
Ranked List
Upvote or downvote to decide the best list item
Meme
Upload your own images to make custom memes
Video
Youtube, Vimeo or Vine Embeds
Audio
Soundcloud or Mixcloud Embeds
Image
Photo or GIF
Gif
GIF format