Swiss National Bank Cites Economic Uncertainty, Urges Stronger Oversight for UBS
The Swiss National Bank (SNB) warned on Thursday that the global economic outlook remains highly uncertain, citing ongoing trade and geopolitical tensions. It also emphasized the need to address weaknesses in Swiss financial regulation to enhance UBS’s resilience.
“Multiple risk factors could worsen the effects of future economic or financial shocks,” the SNB stated in its 2025 Financial Stability Report.
Among those risks are elevated global public debt levels, stretched valuations in international housing markets, corporate bonds, and U.S. equities.
Domestically, the SNB noted that Swiss bank profitability improved in 2024, largely due to UBS’s strong performance. Capital ratios held steady, while banks maintained solid liquidity and capital buffers, all contributing to overall sector resilience.
However, the SNB cautioned that regulatory gaps remain and must be closed to safeguard the financial system. It expressed support for recent proposals from the Swiss government, introduced earlier this month, which aim to prevent future financial crises.
The report also highlighted that UBS, now Switzerland’s sole major bank after acquiring Credit Suisse in 2023, still faces significant risk exposure under various stress scenarios.
The SNB backed the government’s key proposal requiring UBS to deduct its stakes in foreign subsidiaries from its Common Equity Tier 1 capital. “From a financial stability standpoint, this is the most effective solution,” the SNB said.
