Swiss finance minister chides US and Europe for ‘ticking time bomb’ debt levels.

ZURICH (Reuters) – Debt levels in the United States and Europe pose a risk to international financial stability and to Switzerland, Swiss Finance Minister Karin Keller-Sutter said in an interview published on Saturday.

In an interview with Swiss daily Blick, Keller-Sutter praised Switzerland’s “disciplined” finances, which he said had enabled the country to deal with the economic challenges posed by the COVID-19 pandemic and Russia’s invasion of Ukraine.

In contrast, other countries are “so indebted that they are no longer able to act,” she said, citing France as an example.

“Or look at America. It’s a ticking time bomb. The mini-crash on the stock markets at the beginning of August was a warning shot,” the minister was quoted as saying.

“It was an expression of investors’ fear of a recession. Debt levels in the US and Europe are a risk to international financial stability and a risk to Switzerland,” she added.

Keller-Sutter also discussed a government proposal to make Swiss bank UBS hold more capital following its acquisition of former rival Credit Suisse after it collapsed last year.

She defended the additional capital requirements needed to protect Switzerland from another banking crisis.

UBS CEO Sergio Ermotti criticized the proposal and was asked if he had been contacted about it, saying:

“No, I have not been in contact with him. This is now a normal political process.”

The paper also asked what he thought of speculation that UBS could move its headquarters abroad if it deems conditions in Switzerland no longer suitable for it.

“The Federal Council (cabinet) thinks it is good for the economy to have a big Swiss bank. But the bank must decide for itself how it wants to position itself”.

UBS has repeatedly said it is committed to Switzerland.

(Reporting by Oliver Hirt; Writing by Dave Graham; Editing by Helen Popper)