Ermotti also called into question the need for 24 cantonal banks. Keystone / Elia Bianchi
Having two big players like UBS and Credit Suisse provides no “compelling” economic benefit for Switzerland, Sergio Ermotti has told the NZZ am Sonntag newspaper.
“The strength of the country’s financial centre is its diversification, which is much more important than the number of big banks,” the former UBS CEO said in an interview published on Sunday. In the last ten years, cantonal banks have grown both bigger and stronger, as have regional banks like Raiffeisen and some larger private banks.
“The domestic market is not dependent on two big banks,” Ermotti pointed out, adding that their market share in lending and mortgages is no bigger than that of other banks. He also questioned the need for 24 cantonal banks.
Ermotti believes that if Credit Suisse – which has been hit by a series of scandals and crises in recent years – focuses on its strengths and implements tough reforms, it can survive as an independent bank.
Losses due to climate change
Now the chairperson of Switzerland’s largest reinsurance company, Swiss Re, Ermotti said that extreme weather events in the last decade have led to an annual increase of 5-7% in insured losses. If the average global temperature rises by 3.2°C by 2050, he added, the global economy could lose up to 18%. The need to act on climate change is therefore urgent, he said.
Ermotti also said the decision to gradually decommission Switzerland’s five nuclear power plants was a mistake.
“We ought to acknowledge that nuclear power can be part of a diversified energy strategy,” he said. “This also means that we need to invest massively in renewables and energy storage so that we can cover the base load of energy supply as soon as possible.”
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