This is a story of two presidents with starkly different approaches to banking regulation—Donald Trump in the U.S. and Karin Keller-Sutter in Switzerland—and how their policies are shaping financial institutions.Trump’s Deregulatory DriveFollowing Trump’s election victory on November 5 last year, global banks saw their stocks surge. Wall Street expected a deregulatory push, and Trump delivered. Within weeks, he replaced key regulators and took direct control of rulemaking. In some cases, such as the Consumer Financial Protection Bureau, he moved to dismantle oversight entirely.The impact extended beyond the U.S., encouraging deregulatory initiatives in the UK and EU. European banks, including Barclays and Deutsche Bank, saw stock gains similar to their U.S. counterparts, with rises of 20-25%.Switzerland’s Opposite ApproachIn contrast, Switzerland’s rotating presidency has put Finance Minister Karin Keller-Sutter at the helm. She and Swiss regulators are taking the opposite approach—tightening financial rules in response to the 2023 Credit Suisse collapse and its state-engineered rescue by UBS.Switzerland’s financial watchdog, FINMA, is becoming more assertive. Planned reforms include introducing a senior managers’ accountability framework similar to the UK’s and imposing stricter capital requirements on UBS.Tougher Rules for UBSUBS now faces the prospect of holding more capital than its global peers. Swiss regulators propose raising its core equity tier 1 ratio from 14% to 17-19%, a move that could cost up to $25 billion. While UBS’s stock initially rose after Trump’s election, it dropped sharply in early February after the bank warned of the impact of these regulations.While UBS has limited options to resist, potential compromises include agreeing to cap its investment bank’s size or pushing for Switzerland to establish a public liquidity backstop—something most major economies already have.A Balancing ActFinal reform proposals are expected in May, with months of negotiations ahead. Despite the Credit Suisse debacle, Switzerland’s tradition of compromise may prevent it from straying too far from global norms. UBS and its investors can only hope that balance prevails. (ICE BERNA)

Fonte notizia: Financial Times