When the chief executive of Europe's biggest wealth manager warns that the continent is in decline, regulators tend to listen — and then often do nothing. That, at least, is the frustration Sergio Ermotti, who runs the Swiss banking giant UBS, voiced in a recent video interview with the Financial Times. Europe, he argued, will keep losing ground to the United States and Asia until a 'very profound and painful crisis' — something on the scale of the 2012 Greek debt crisis — finally forces politicians to act.
Ermotti's diagnosis was blunt: 'over-regulation across the board,' excessive bureaucracy, and a clear lack of innovation. He argued that things in Europe were bad, but 'not bad enough to take action,' pointing to no growth and a divergence in productivity compared with rival economic powers. His comments echoed those of JPMorgan chief Jamie Dimon, who last year described Europe as 'losing' the race to rival the US and China. Politicians, Ermotti added, will never be elected by asking voters to make sacrifices, and so instead promise higher taxes, more debt, and more fiscal stimulus — even though Europe is already heavily indebted.
But Ermotti's complaints aren't only continental. UBS is locked in its own fight in Switzerland, where lawmakers want to tighten the rules after Credit Suisse, the country's second-biggest bank, collapsed in 2023. UBS rescued Credit Suisse in an emergency takeover, and now the Swiss government wants to require UBS to hold roughly $20 billion in additional capital — a financial cushion designed to absorb future shocks. Ermotti says the proposals are not proportionate, not internationally aligned, and don't recognise the actual reasons Credit Suisse failed. 'We can't have a requirement that is 50 per cent higher than our peers,' he told the FT.
Here's the catch. The Swiss government has already watered down part of the package as a concession to UBS, but it has refused to drop the core proposals, which now go to parliament. Asked whether UBS could shift its headquarters out of Switzerland, Ermotti didn't quite slam the door. The bank's focus, he said, was on operating successfully from Switzerland, and UBS was 'not even thinking about another option.' Then he added that it remained the fiduciary duty of the board to examine any potential options — a careful piece of corporate language that effectively keeps the threat alive.
He is not alone in keeping it alive. UBS has reportedly held discussions about relocating to the US if the capital proposals aren't softened. The activist investor Cevian Capital has gone further, saying UBS would have 'no other realistic option' but to leave the country if the reforms aren't scaled back. Ermotti, who turns 66 next week, has agreed to stay on as CEO for a three- to five-year term beyond his 2023 return. He also warned of a 'high degree of complacency' in financial markets and said recent stress in private credit — loans made outside the traditional banking system — 'could be systemic,' though not on the scale of 2008. The message, between the lines, is the one regulators always least want to hear: fix it now, or fix it later, after something breaks.
The CEO of Europe's largest wealth manager just told the Financial Times the continent is sleepwalking into decline — and hinted his own bank might pack up and move to America.
Sergio Ermotti, the chief executive of UBS, told the FT that Europe will keep falling behind the United States and Asia until a 'very profound and painful crisis' — on the scale of the 2012 Greek debt meltdown — forces politicians to act. His diagnosis: 'over-regulation across the board,' too much bureaucracy, and not enough innovation.
He's also fighting closer to home. After UBS rescued the collapsing Credit Suisse in 2023, Swiss regulators proposed new rules that would force UBS to hold roughly $20 billion in extra capital. UBS has even discussed moving its headquarters to the US if the rules aren't softened.
This isn't just a banker griping about paperwork. It's a fight over how a country insures itself against the next financial fire — and what that insurance costs the economy.
If you're a teenager thinking about studying in Europe, working for a European company, or investing in European stocks one day, this is the backdrop. A continent whose biggest CEOs publicly say it's losing isn't a continent attracting the next generation of tech, finance, or AI talent — and that shapes job markets, salaries, and where the cool startups get built for the next 20 years.
There's a bigger pattern here: governments that bail out a failing bank usually overcorrect with strict rules afterwards, then watch their financial industry shrink. The US did the opposite after 2008, letting its big banks get bigger. Watch what the Swiss parliament decides on UBS's capital hit — and whether other European banks start dropping similar 'maybe we'll move' hints. If they do, expect a regulatory race to the bottom that looks a lot like the corporate-tax wars of the 2010s.