Swiss bank UBS is planning to separate its investment bank and incorporate it outside of Switzerland to placate regulators, the Wall Street Journal (WSJ) reported yesterday.
UBS is considering incorporating its investment bank, which had to be rescued by the Swiss government after it lost billions during the financial crisis, in London, New York or Singapore, where it would have its own capital and be overseen by local regulators, the WSJ reported.
A UBS spokesman declined to comment on the report, which he described as speculation. Switzerland’s financial market regulator FINMA, which the newspaper said was pushing UBS to make the change, was not immediately available for comment.
Last month, UBS called for a year’s delay to stringent Swiss capital rules to allow more clarity on international regulation, while striking a more conciliatory note by vowing to keep its base in Switzerland.
“It’s definitely something ... they have been looking at,” Vontobel analyst Teresa Nielsen said. “They have to have all the possibilities open to have a level playing field with their competitors. They would be very disadvantaged if this Swiss regulation were to come through.”
UBS chief executive Oswald Gruebel has said the stiff Swiss standards could force UBS to move units abroad.
Last week, he moved to reassure staff at the investment bank, saying UBS planned to invest in rebuilding teams and in “existing talent,” acknowledging recent scrutiny of personnel turnover. UBS’s ambitions went beyond being among the top five investment banks in the region, he said.