Swiss price regulator puts UBS under observation

(Reuters)-10/07/2024

Switzerland’s consumer pricing watchdog has put UBS (UBSG.S), opens new tab under observation following its takeover of Credit Suisse, the regulator said on Thursday, amid concerns that the market power of the enlarged lender could lead to higher loan charges.

The supervisor had met with financial market regulator FINMA, competition authority ComCo and the Swiss National Bank to discuss consequences of the takeover, it said in a statement.

The meeting laid down the groundwork for necessary cooperation between the different authorities in future, they said.

UBS on Monday said it had completed the merger of its domestic unit with Credit Suisse’s operations in its home market.

UBS had no immediate comment on the decision but a spokesperson pointed to previous statements the bank had made noting that there was plenty of competition within the Swiss banking sector.

FINMA last month ruled that the takeover did not create any competition concerns, despite recommendations from ComCo that it merited further scrutiny.

“ComCo’s analysis has shown that the merged UBS now has market power or dominance in some markets,” the pricing supervisor’s office said.

“This means that the price supervisor is directly responsible for monitoring price abuse in these markets,” it added.

The supervisor said it was looking in particular at loan interest rates. Swiss businesses have raised concerns that the market power of the enlarged UBS could lead to higher loan costs in future.

“The price supervisor assumes that the merged major bank is aware of its social responsibility and will behave accordingly,” the office said.

The office said it hoped that regulatory interventions will not be needed but would not hesitate to act if necessary.

On its website the Swiss price regulator says it is generally responsible for assessing prices where prices have not been formed through free competition, but have been set by a dominant company, a cartel or the state.