UBS to struggle as Fed, ECB 'reversed stance'

Thursday, 21. March 2019 07:35

Sergio Ermotti, chief executive of UBS Group AG, told CNBC that plans for this year will be impacted by lower interest rates. In an interview published on Thursday, he said the United States Federal Reserve's decision to pause compares to an earlier projection that it would raise them a few times and that the European Central Bank "also reversed its stance," affecting expectations for borrowing costs.

The head of the biggest bank in Switzerland reiterated that the environment is currently "lacking any elements of positive seasonality" after "an exceptional" first quarter last year for the industry even more for UBS. Investment banking too has had "an outstanding" start to 2018 to live up to, he added. Stock markets have recovered "but the conviction level of both institutional and private clients is not there," according to Ermotti, who noted a year-over-year decline in volumes of 20% in the foreign exchange market as volatility is "very low."

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