Switzerland Today

Dear Swiss Abroad,

Another day, another twist in the Swiss banking drama. Former UBS CEO Sergio Ermotti’s back in town! “We felt we had a better horse,” said UBS chairman Colm Kelleher of the decision to replace current CEO, Ralph Hamers, after less than three years in charge. Read on for a guide to the banking musical chairs. Plus other news and stories from Switzerland on Wednesday.

© Keystone / Jean-christophe Bott

In the news:  A group of retired Swiss women (pictured) have taken their government to a top European court over what they claim is its failure to take stronger action on climate change.

• The group, which counts around 2,000 members across Switzerland with an average age of 73, argues that older women’s rights are especially infringed because they are most affected by the extreme heat that will become more frequent due to global warming, to which current Swiss climate policy contributes.
• State employees in canton Vaud, western Switzerland, are continuing to press for higher wages. Yesterday some 3,000 people took to the streets in Lausanne in support of this demand. The trade unions, however, have signalled a willingness to compromise.
• Ninety-six Leopard tanks are sitting mothballed in a hall in eastern Switzerland. The security commission of the House of Representatives has voted to decommission 25 of them, thereby enabling their sale back to their German manufacturer.

Keystone / Elia Bianchi

UBS has rehired Sergio Ermotti (pictured) as CEO to steer its massive takeover of neighbour Credit Suisse – a surprise move to take advantage of the Swiss banker’s experience rebuilding the bank after the global financial crisis.

The trader turned corporate problem fixer faces the tough challenge of laying off thousands of staff, cutting back Credit Suisse’s investment bank and reassuring the world’s wealthy that UBS remains a safe harbour for their cash.

“This is not a Swiss solution,” said UBS’s Irish chairman Colm Kelleher this morning, seeking to play down any role of Ermotti’s nationality in getting the job, and instead emphasised his focus was on the large risks of making the merger work for UBS. “Being Swiss helps,” Kelleher said. “But the majority of our business is global.”

Ermotti, who was chief executive of UBS from 2011 to 2020 and is now chairman of Swiss Re, will take the helm from April 5. He made a plea for “a little bit of patience” over a “couple of months” to allow the bank to forge its strategic plan. “We cannot rush into decisions which are regrettable,” he told journalists.

The 62-year-old said he returned to UBS after feeling what he termed “a call of duty” and added he had always wanted to be involved in a massive transaction like the takeover of Credit Suisse.

The news came ten days after UBS bought its Swiss rival in a shotgun merger engineered by Swiss authorities to stem turmoil after Credit Suisse ran aground. That deal made UBS Switzerland’s one and only global bank, underpinned by roughly CHF260 billion ($283 billion) in state loans and guarantees, a risky bet that makes the Swiss economy more dependent on a single lender. UBS shares climbed 1.8% on Wednesday.

Outgoing Dutch CEO Ralph Hamers, who had succeeded Ermotti in November 2020, “has agreed to step down to serve the interests of the new combination … and the country”, UBS said.

© Keystone/Peter Schneider

The Swiss government has said it wants to finalise a mandate for a resumption of negotiations with the European Union over the next three months. Exploratory talks with Brussels had shown “positive dynamics”, the government said today. 

More than 20 meetings between Swiss and EU officials as well as the dialogue between the government and the cantonal authorities had helped clarify the situation, it added. However, further specifications are necessary about the protection of existing salary levels in Switzerland.

Relations between the two sides have been deadlocked since the Swiss government rejected the results of negotiations on an accord regulating the about 120 bilateral agreements with the 27-nation bloc. A series of exploratory talks have taken place since March 2022 to try to re-start formal talks between the two sides.

Switzerland is not a member of the EU and voters in 1992 rejected a proposal to join the European Economic Area. The EU is Switzerland’s main trading partner.