UBS CEO calls Switzerland's leverage ratio plan 'unrealistic'

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Switzerland's plan to raise the leverage ratio required of banks is unrealistic, the CEO of UBS said in a newspaper interview published on Sunday.

Reuters reports that last month, Switzerland's finance minister said the country's banks should be subject to a leverage ratio of between 6 and 10%, against the 3% for global banks under rules that come into force in 2018.

'On the requirement for 6-10%, all I can say is that this is an unrealistically high demand,' Sergio Ermotti told the Schweiz am Sonntag newspaper, noting that Swiss regulators already required more than their peers abroad.

Such a policy would lead to higher interest rates on mortgages and corporate loans, and end banks' ability to offer favourable loans, which had benefitted the Swiss economy for the past 50 years, he said.

'Already about 25% of Swiss banks are earning no money and another 25% have such low margins that they are unlikely to survive in the long term,' he said.

To access the complete Reuters article hit the link below:

UBS chief says Swiss plan to raise leverage ratio is unrealistic

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image: © Martin Abegglen

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