New UBS must pass antitrust tests abroad

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Those responsible want the merger of Credit Suisse and UBS to be completed quickly. But it may take longer than expected. Because it must be checked whether the new mega bank violates foreign competition law. So says Patrik Ducrey (59), chairman of the Swiss Competition Commission.

The fact is that in 2022, UBS generated an annual turnover of almost CHF 32 billion. The now rescued CS still brings it to almost 15 billion. This means that the elephant wedding is so important that it must be reported in (almost) every country under competition law. Subsequently, the respective cartel authorities must determine whether the merger could create a dominant position in a particular business area.

Procedures take months or even years

Such a review takes at most one to three months, but sometimes years. If a competition authority objects, this can extend the process even further. According to antitrust experts, all business units of the new bank must be audited.

If there are concerns in a country, the new UBS will not be allowed to do business there until they are resolved. Especially in important markets, this can have drastic consequences, from loss of turnover to enormous reputational damage – poison for any bank.

Nobody wants to burn their fingers

It is not possible to say exactly how great the risk is – because the local authorities do not dare to go on the branches. The Federal Public Service Finance (FDF) refers on request to the Secretariat of State for International Finance (SIF). It only says that the financial market regulator Finma is responsible for the settlement, but inquire directly with UBS.

But there too they remain silent and refer back to the SIF. In short: No one can or will answer questions. “No one wants to burn their fingers,” says an antitrust lawyer who also wishes to remain anonymous. This is not surprising – firstly, such a mega-merger in the banking sector is so rare that there is hardly any experience with it. And secondly, nobody wants to upset the markets even more in this delicate situation. However, that does not alter the fact that the cartel question is on the table.

Source:Blick