A national debate on bank separation has broken out in Switzerland, focused on the UBS megabank. Whereas the government (Bundesrat) wants the bank to increase capital buffers, former Swiss People’s Party president Christoph Blocher wants to split it into two banks: an investment bank and a commercial/wealth manager bank. Since the investment banking of UBS is concentrated in the U.S., Blocher’s idea is to split UBS into a U.S. bank and a Swiss bank.
In an interview with Sonntags-Zeitung about his idea, Blocher said “I ask myself: Can Switzerland still rescue a bank such as the UBS? I emphasize it: it is too big to fail.”
SZ: What do you want to do against that?
Blocker: Split it up! The Trennbanken system would be one option. The Americans had this system until the 1990s.
SZ: And now you want to reintroduce it?
Blocher: No, I think there is a better solution: UBS must be split up—into a Swiss UBS and an American UBS. That can easily be done.
