UBS Chair Kelleher Wants Better Bank Liquidity to Lift Stability

(Bloomberg) — UBS Group AG Chairman Colm Kelleher said better access to liquidity and stronger paths to recovery are vital to improve regulations for banks in the wake of the Credit Suisse collapse.

As major global lenders already have high capital requirements, “we must make sure that we have proper and robust recovery and resolution programs across the system,” he said Friday at a forum organized by the Bretton Woods Committee at the UBS Singapore office.

Access to liquidity, including an expansion of collateral pools, is also crucial, Kelleher said. UBS, which bought Credit Suisse in a government-brokered deal, is under pressure as the Swiss financial regulator considers making banks hold more capital to strengthen its financial system.

Major global banks including UBS are pushing back against financial regulators’ pressure to apply more stringent rules on them following the Credit Suisse saga and turmoil in some US regional lenders. US banks won their battle this week as the Federal Reserve agreed to revise its capital rules proposal, cutting the expected impact to the largest lenders by half.

Switzerland’s financial regulator Finma sees the integration of Credit Suisse a top supervisory issue and is now focused on an early intervention to prevent risks to financial stability. The authorities are designing new rules including higher capital requirements for UBS, which has swelled in size after rescuing Credit Suisse in March 2023. The planned regulation will be finalized over the next couple of years.

UBS has pushed back against the tougher banking regulation, which could see UBS’s capital requirement rise by as much as $25 billion. Chief Executive Officer Sergio Ermotti and Kelleher have repeatedly said it’s the wrong remedy, while blaming regulators for the Credit Suisse downfall.

“Make sure that you have banks who are strong enough to do it, but then don’t post hoc punish those banks for doing it as well,” Kelleher said.

–With assistance from Russell Ward.

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