trending Market Intelligence /marketintelligence/en/news-insights/trending/fbDy5WrmZVW-lfVVxGef3g2 content esgSubNav
In This List

UBS CEO denounces tax information requests


Managed Services Insights: The client lifecycle management solution


Technology & Automation Insights: Elevating KYC and onboarding efficiency


Banking Essentials Newsletter: May 15th Edition


Data Insights: Enhancing regulatory compliance and client lifecycle management.

UBS CEO denounces tax information requests

's CEO has stronglycriticized efforts to force the Swiss bank to disclose tax-related informationfrom the past and also said any costs arising from negative interest rates maybe passed on to private wealth clients and institutional investors.

SergioErmotti told Switzerland's SonntagsZeitungthat UBS questions the legal basis for the recent issued by the SwissFederal Tax Administration on behalf of French tax authorities.

Thedata in question relates to former and current French domiciled clients and tothe period between 2006 and 2008. But Ermotti told the newspaper that hebelieves that, under a Swiss-French agreement, the lender does not have toshare any information for the years up to and including 2010, and possible evenup to 2013.

Switzerland'sforthcoming automatic exchange of information (AEOI)agreements with other countries, which aim to make cross-border tax evasionimpossible, do not cover cases from the past such as this one, Ermotti added.

"Thequestion is why we're nevertheless asked to [reveal the information]," hesaid in the interview published July 10.

Ermottiargued that the investigation is "politically motivated," telling SonntagsZeitung: "It's not normalthat what are supposed to be confidential details related to the case areregularly published in the newspaper LeMonde, and that a minister publicly demands a sentence before theinvestigation has even been concluded."

As aresult of Switzerland's agreements with, for instance, France, there is"zero legal certainty" for the country's lenders, Ermotti said. Headded that the approach created the conditions for "a new offensiveagainst Swiss banks," adding that he expects other countries to followFrance's lead and make similar data requests.

TheFrench request was based on information received from German tax authoritiesafter they seized files several years ago, which Ermotti said has led UBS totake "additional steps" to secure its data. He argued that the bankhad "to adjust" to a new environment in which "new risks arecreated" because of the approach taken by the authorities.

Meanwhile,Ermotti said he could not rule out that UBS might impose negative interestrates on private wealth clients and institutional investors, although there areno current plans to do so.

On abroader economic level, Ermotti said he does not expect a repeat of the 2008crisis, but that the current market turmoil will lead to about 10%, or even upto 20%, of all Swiss financial institutions disappearing within the next fewyears. He also defended counterpart Tidjane Thiam, saying criticism of theCredit Suisse GroupAG CEO was "excessive" because the implementation of anew strategy can be judged only in the long term.

Ermottiand Thiam — who spoke to NZZ am Sonntagin an interview published the same day — both suggested that a recentSchweizerischeNationalbank assessment that their banks face of CHF10 billionapiece was wrong. Ermotti said the central bank's report was"misleading" because UBS "exceeds the capitalrequirements," while Thiam said the regulator had given "a positiveassessment of our progress" and that its report had therefore been"misinterpreted."