March 30, 2023
Peter Vanham here, back from paternity leave, filling in for Alan.
The Swiss banking world woke up to another “surprise” yesterday, as former UBS CEO Sergio Ermotti returned to the top spot he held until 2020, replacing the Dutchman Ralph Hamers. As CEO of the newly formed UBS-Crédit Suisse megabank, Ermotti will oversee the merger that came into existence following the near bankruptcy of CS earlier this month.
The return of the Italian-speaking Swiss is “a good and necessary” move, Markus Diem Meier, editor-in-chief of the Swiss financial weekly Handelszeitung told me on the phone from Zurich yesterday. “It’s difficult to have the CEO and chairman be foreigners who don’t know the country,” he said, referring to the Dutchman Ralph Hamers and the Irishman Colm Kelleher, who led UBS until now.
However, what particularly struck me in the announcement was the emphasis the bank put on the importance of its “stakeholders” in the move.
“Our full attention will be on delivering the best possible outcome for our clients, our employees, our shareholders, and the Swiss government,” Ermotti said, after vowing to act in “the interest of all stakeholders.” Hamers did the same, saying he was stepping aside “in the interests of the new combined entity and its stakeholders.”
According to Diem Meier, however, the only stakeholder that really mattered in the CEO switch was the Swiss government (and the people it represented). “Despite not speaking Swiss German better than Hamers, Ermotti speaks the language of the country,” he told me. “He knows and is able to calm down the lawmakers in Bern, who are already looking into making new laws on the financial sector.”
This very Swiss tale is telling of a broader trend that is playing out around the world. Government is reclaiming its role as the player who decides the winners and losers in the economy through regulation, industrial policy, and emergency measures. A commitment to “stakeholderism” may really be a way for executives to keep the rise of this “statism”–the new, more powerful role of the state in the economy–in check.
In Switzerland, the government reluctantly and grudgingly brokered the forced marriage of its too-big-to-fail banks. But elsewhere, including in the EU and the U.S., political leaders are all too eager to re-assert control. It doesn’t make stakeholder capitalism less relevant, but it sure puts it in a different light.
More news below.