CNBC Interview with UBS CEO Sergio Ermotti

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http://www.cnbc.com/2017/07/10/cnbc-interview-with-sergio-ermotti-ceo-ubs.html

There are still weak players in Europe

“It is clear that Europe is not one pot in which all banks are behaving the same way. There are winners and there are very strong players in Europe and there are still weak players that should be allowed to restructure or to be consolidated.”

They desire normalization of rates

“The sector…would welcome a little bit of normalization on the rates side in Europe. It is clear to me that we’ll see what’s going on in the U.S.. If the U.S. hikes more than once or two times it is going to be very difficult for the ECB to stay on hold for too long. I think that you don’t want to create too much of an interest rate gap between the between the euro and the dollar.”

Negative rates have not been passed to retail investors

“to pass the cost of negative rates to the borrowers it’s, you know, it’s a counter-intuitive measure in any case and it’s going to be very hard. I think that at this stage we are limiting and we basically are not passing the cost of negative rates to so-called retail investors. But we have been passing more and more the cost of negative rates to wealthy individuals or family offices and corporate clients.”

Need for change in policies to boost business

“I do see a little bit of a stagnation of business, and a little bit of volatility and change in policies may help to give a little bit of momentum to the business.”

People are investing cautiously 

“if I look at the cash balances as a percentage of wealth we manage, they have been coming down from the high-20s to around the mid-20s. So this is clearly a sign that people are willing to invest more, but still very cautious. You know 26/27 percent cash balances is still almost twice as high as we had five years ago.”