Swiss will keep universal bank model: top banker

Thu Jan 28, 2010 12:01pm EST
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DAVOS, Switzerland (Reuters) - Switzerland, home to UBS UBSN.VXUBS.N and Credit Suisse CSGN.VX, will keep its universal bank model despite U.S. moves to split commercial banking from riskier activity, its bank lobby said on Thursday.

"I do not think we'll take the direction of separating banking activities. We have a long tradition of universal banks in Switzerland," Patrick Odier, the banker who heads Switzerland's powerful banking association, told Reuters.

Swiss regulators have been faster than others at imposing more stringent requirements on bank capital ratios and on leverage after the country's economic stability was threatened by the near-collapse of bank flagship UBS in late 2008.

Analysts say the combination of investment banking with large wealth management activities at UBS and Credit Suisse give these banks a more balanced business mix than many rivals in the current regulatory environment. Both banks have boosted their capital ratios and have also cut down aggressively their balance sheet and on proprietary trading.

U.S. President Barack Obama unveiled last week plans to introduce curbs on potentially risky banking activities like proprietary trading, a move some say could mean the separation of investment banking from commercial banking in that country.

Swiss National Bank Chairman Philipp Hildebrand, a vocal supporter of stricter financial regulation, has said the U.S. proposals looked interesting.

But Swiss bankers do not expect a shift in the current regulatory approach.

"We would probably be very keen to continue in that direction of enhancing our capital ratios (and) leverage ratio requirements to the benefit of rendering the universal banks safer," Odier said.

(Reporting by Lisa Jucca, Editing by Lin Noueihed)