Swiss Finance Minister Criticizes US and Europe for ‘Time Bomb’ Debt Levels, Reports Reuters

ZURICH (Reuters) – Debt levels in the United States and Europe pose a risk to international financial stability and to Switzerland, according to Swiss Finance Minister Karin Keller-Sutter, who made these remarks in a newspaper interview published Saturday.

In her discussion with Swiss daily Blick, Keller-Sutter highlighted Switzerland’s “disciplined” financial approach, which she credited for the country’s ability to navigate the economic challenges arising from the COVID-19 pandemic and the Russian invasion of Ukraine.

She contrasted this with other nations, citing France as an example of a country overwhelmed by debt: “So indebted they’re hardly able to act any more,” she stated. Regarding the U.S., she referred to the situation as a “time bomb” and noted that the stock market’s mini-crash at the beginning of August served as a warning sign. “It was an expression of investors’ fear of a recession. Debt levels in the U.S. and Europe are a risk to international financial stability and a risk for Switzerland,” she added.

Keller-Sutter also addressed a government proposal for Swiss bank UBS to increase its capital reserves following its acquisition of former rival Credit Suisse after its collapse last year. She defended the additional requirements, stating they are essential to safeguarding Switzerland against potential future banking crises.

UBS CEO Sergio Ermotti has expressed dissatisfaction with the proposal, prompting questions about whether Keller-Sutter has been in communication with him. She replied, “No, I haven’t been in contact with him any more. This is now a normal political process.”

When asked about speculation that UBS might consider relocating its headquarters if conditions in Switzerland were deemed unfavorable, Keller-Sutter responded, “The Federal Council believes it’s good for the economy to have a large Swiss bank. But the bank must decide for itself how it wants to position itself.” UBS has consistently reaffirmed its commitment to Switzerland.