Switzerland is considering a vote on a proposal to partially nationalize UBS Group, following concerns about the bank’s size and potential risk to the Swiss economy. The popular initiative, currently under review by federal authorities, suggests amending the Swiss constitution to manage large banks of systemic importance as joint stock companies, with the confederation as the majority shareholder in terms of share capital.
The initiative was launched by Bernhard Schmidt, a 58-year-old school headmaster from near Zurich, who voiced concerns over UBS’s size and potential impact on the country’s economy. “UBS is a cluster risk for our economy,” Schmidt told weekly paper SonntagsZeitung on Monday. “In the next crisis, the whole country could go under.” Currently, the initiative committee consists solely of Schmidt’s friends and family, but he hopes that supporters and donors will join his cause.
Following the government-brokered takeover of its former rival Credit Suisse, UBS’s assets are now about twice the size of the Swiss economy. This has sparked worries that the bank would be too big to rescue in case of a financial crisis.
The proposal is still in its early stages. If approved by federal authorities, the initiators will have 18 months to collect 100,000 signatures to further their cause. The parliament and government would then need to weigh in before the issue could be put to a national vote, a process that is likely to take several years.
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