UBS and Switzerland Should Play Their Game of Chicken Nicely
A game of chicken between UBS Group AG and Swiss politicians is coming. The government is due to unveil a draft law to beef up too-big-to-fail rules in early June, which threatens a big hike in capital for Switzerland's only major global bank. The bigger the headline number, the more extreme the reaction from UBS is likely to be. That could mean claims it will have to move country or break itself up — either of which would leave one of the world's major banking centers without a serious player of its own.
In reality, both sides will likely swerve. UBS needs Switzerland as much as the country needs it. Also, the bank has more time and more leeway to deal with some of the stiffer demands likely to be made than it's (understandably) willing to acknowledge.
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