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UBS CEO says he feels a ‘biting headwind' from Swiss regulators

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UBS Group AG Chief Executive Officer Sergio Ermotti attacked Switzerland's banking regulators, saying that a discussion around too-big-to-fail rules has been set off by local authorities trying too hard.

[ZURICH] UBS Group AG Chief Executive Officer Sergio Ermotti attacked Switzerland's banking regulators, saying that a discussion around too-big-to-fail rules has been set off by local authorities trying too hard.

With the financial crisis almost a decade behind, a continued "biting headwind" of new rules set by financial watchdog Finma and other regulators is a drag on profitability, he said.

"The majority of foreign analysts and investors find the Swiss system increasingly difficult to understand," Mr Ermotti said Tuesday in a speech in Zurich. "The Swiss finish has gone from being a seal of approval to a burden."

Switzerland's Finance Ministry is weighing tougher capital requirements for the biggest firms playing a key role in the financial system, a move backed by the Swiss National Bank. Strict capital rules - which build on international standards and are known as the "Swiss finish" - have proved a thorn in the side of the nation's biggest banks as they shift into growth mode after years of painful restructurings.

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"Big is bad, small is good," Mr Ermotti said was the message received from regulators. "I am criticising the constant fear-mongering."

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