While the Swiss government wants to decrease risk to its economy by making sure banks maintain a 10% capital ratio, the nation’s right-wing Swiss People’s Party (SVP) wants to split Swiss banking giants UBS and Credit Suisse from their American businesses, according to Reuters (via The Guardian).Former justice minister and SVP main man, Christoph Blocher, says his party will oppose proposed legislation that would force UBS and Credit Suisse to adhere to harsh new capital standards.
The Swiss incumbent party proposed legislation last week that, if passed, would force UBS and Credit Suisse to have a capital ratio of at least 10%. Basel III, of course, set a 7% minimum.
UBS CEO Oswald Gruebel has already said that if those rules were implemented, the bank may look elsewhere for a new command post. He’s previously said more rigid rules will be “dangerous” for the Swiss financial industry.
The SVP believes a 10% ratio would make credit more expensive for Swiss borrowers, and would result in job losses, and would rather see their banks cut off from their American arms.
Christoph Blocher told Swiss newspaper Tages-Anzeiger, via Reuters,
The most important thing is that the banks should be obliged to split off their excessively big American parts because up until now it was the American parts which caused the banking crisis in Switzerland.
If we hived off America, we would also automatically separate investment banking from the less risky wealth management business in Switzerland.