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Swiss price regulator puts UBS under observation

by Uma
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Swiss price regulator puts UBS under observation

Swiss price regulator puts UBS under observation

ZURICH (Reuters) -Switzerland’s pricing supervisor has put UBS under observation following its takeover of Credit Suisse, the regulator said on Thursday.

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

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

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

The lender did not immediately respond to a request for comment on Thursday.

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.

(Reporting by John Revill, editing by Miranda Murray)