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Economic news
14.03.2024

The takeover of UBS has created new risks for the Swiss economy - OECD

The Organization for Economic Cooperation and Development (OECD) said that UBS's rescue takeover of Credit Suisse has created "new risks and challenges" for the Swiss economy.

"The takeover of UBS may have provided financial stability, but it also raises questions about the need to strengthen financial regulation in the future, given that the merger of banks organized by the government led to the creation of a group whose assets overshadow the country's economic growth," the OECD warned.

The Financial Stability Board said in February that the collapse of UBS could pose serious risks to the Swiss economy, and called on Bern to strengthen control over banks.

In the next few months, the Swiss government should make proposals on how to tighten the rules on large banks, including expanding the powers of the main supervisory authority, FINMA, which requires more effective tools.

Regarding Switzerland's economic prospects, OECD expects GDP to grow by 0.9% in 2024 and 1.4% in 2025, which is below the country's long-term average growth rate (1.8%) and the government's December forecasts (1.1% and 1.7%, respectively). The OECD added that weak external demand, tightening financing conditions and increased uncertainty are putting pressure on the Swiss economy.

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