On Monday, UBS rejected government proposals to strengthen banking regulations in the wake of Credit Suisse’s collapse, saying they would make Switzerland uncompetitive and arguing instead for less costly alternatives.
We covered the story in our previous Insights on September 15, 2025, and April 3, 2025, and now we are at the negotiation stage.
The government launched consultations on the proposals in September, giving stakeholders until early January to respond.
UBS also said that if regulators had properly enforced existing Swiss rules, Credit Suisse would have had to make changes earlier, which would have ensured its survival.
Although the government has publicly confirmed its hard line on the proposed new rules, sources close to the matter say a compromise is likely to emerge.
In December, Reuters reported that the government is preparing to soften some new rules over which it has direct control, while lawmakers say parliament is likely to opt for more moderate regulations than those initially proposed by officials.
This is the context for the bank CEO’s exit plan, as he intends to step down in April 2027, when the integration with Credit Suisse is expected to be complete. Ermotti had committed to spending three to five years as CEO of the bank, which had tasked him with overseeing the complex integration of Credit Suisse and developing a growth strategy for the combined group, as well as cultivating a pool of successors. It appears that the succession will be carried out internally, with the following candidates:
• The head of wealth management, who was promoted to the group’s board of directors in March 2024 after impressing the bank’s management with his handling of the wealth management division.
• A former Credit Suisse executive who joined UBS after clashing with his former employer over interference in his privacy, with the bank allegedly hiring private investigators to monitor his movements. After reaching an agreement with Credit Suisse, he moved to Hong Kong in 2024 to become head of UBS for Asia-Pacific.
• The head of the Pan-American region, including the US market, which is particularly interesting after the conflict with the Swiss authorities.
• The bank’s COO, appointed in October after leading UBS’s non-core and legacy unit, which manages the liquidation and disposal of unwanted parts of Credit Suisse.
In the background is the clash with the Swiss government over the implementation of new measures to protect savers, which should mitigate the damage in the event of a crisis at the banking giant.
The Swiss government is requiring UBS to raise tens of billions of dollars in extra capital; UBS dismisses this solution as disproportionate.
The next CEO will have to manage the implementation of these changes, although a compromise could limit the costs, making it more of an execution issue than a diplomatic battle. Meanwhile, the solid state of UBS’s underlying assets will give it more freedom to pursue the kind of exciting projects that were previously out of the question, such as seeking to accelerate expansion in the US with a major acquisition or by obtaining a full banking license.
Could it be that Ermotti is planning an early exit to leave the (more tedious) executive phase to others and return at a later date (it would be his second return), perhaps as chairman? They are called “boomerang” executives because they are like a tool that is thrown so that it can return to the hands of its thrower: except when it hits the target!
Disclaimer
This post expresses the personal opinion of the Custodia Wealth Management staff who wrote it. It is not investment advice or a recommendation, nor is it personalized advice, and should not be considered an invitation to carry out transactions on financial instruments.
