For SVP doyen Christoph Blocher, UBS is too big for Switzerland following its merger with CS. The country’s risk management plays a role here.
Following its emergency merger with crisis-stricken bank Credit Suisse (CS), the major bank UBS now poses far-too-great a risk for Switzerland.
At least that is the opinion of former federal councilor and SVP chief strategist Christoph Blocher, and even higher capital buffers would not change that suggestion.
Split into two shares
“If something is ‘too big to fail’ – that is, too big to die – then it must be made less ‘too big’, i.e., smaller,” the 85-year-old warned in an interview with the ‘SonntagsZeitung‘ newspaper.
This could be achieved by splitting up or selling parts of the business, he added.
However, existing UBS shareholders could also be given two shares – one for UBS Switzerland and one for UBS America, explained the conservative entrepreneur and former top Swiss politician.
Billions in write-offs broke CS’s neck
Blocher cited the expansion in America through First Boston, DLJ, and Paine Webber as the reason for the measure.
“Firstly, the problems faced by the major Swiss banks were a consequence of their American business,” he emphasized.
“Secondly, I know firsthand that, overall, the major Swiss banks never made any money in America,” he continued.
Even more equity capital or higher state aid for liquidity could not eliminate risks for Switzerland.
At CS, the rules did not work despite massive expansion of banking supervision by the Swiss Financial Market Supervisory Authority (FINMA), Blocher criticized, calling for even more regulation.
As muula.ch reported, the cause of CS’s downfall was a billion-dollar write-off in the US precisely due to those aforementioned acquisitions.
Legally separate
An American bank is not the same as a Swiss bank. It must operate 5,000 kilometers further west in the same way as it would on Zurich’s Bahnhofstrasse, Blocher explained.
“Swiss banks have a tradition of investing their savers’ money safely and responsibly,” said the SVP doyen. In the US, the focus is more on investment banking.
After the split, the US company would be subject to US law and would not have to create additional equity capital unless the US required it to do so.
The Swiss bank would operate under Swiss law and the Swiss would no longer be liable for America, according to the SVP doyen’s ideas.
Warning from Brussels?
The UBS issue is all about Switzerland’s self-determination and sovereignty, Blocher explained.
This probably means that, in the event of a crisis at UBS, only the European Union (EU) would be able to come to the country’s aid.
However, Switzerland must be able to determine its own future, the former federal councilor told the SonntagsZeitung newspaper.
Both UBS in 2008 and CS in 2023 had to be bailed out with state aid. Now, Switzerland has inherited an even bigger problem with the merged UBS, Blocher warned.
November 23, 2025/ena./kut.
