Excessive regulation is stifling business and undermining Switzerland’s ability to compete in the global economy, according to the chief executives of two flagship companies.
“Entrepreneurs need oxygen to breathe and we need to make sure we don’t make life difficult for them,” Ulrich Spiesshofer, head of the power-grid maker ABB Ltd., Switzerland’s biggest industrial firm, said on Friday at the World Economic Forum in Davos. “ABB has self-regulation -- I don’t need corporate regulation on top of that.”
Spiesshofer and his counterpart at UBS Group AG, Sergio Ermotti, were participating in a panel discussion of perceived threats to Switzerland’s model of economic liberalism and direct democracy. Swiss Economy Minister Johann Schneider-Ammann, also a panelist, said Switzerland has a record of liberal market regulation favoring jobs and investment.
“We do create framework conditions which are excellent,” said Schneider-Amman, who is the country’s president in 2016
‘Too Much Bureaucracy’
While Switzerland routinely ranks among the world’s richest and most competitive nations -- it has topped the World Economic Forum’s competitiveness ranking for seven years --, some high-profile business leaders say new laws, including restrictions on immigration and executive pay, are threatening that position. Paul Bulcke, CEO of Nestle SA, also has complained about changes in Switzerland’s corporate law giving shareholders a binding vote on compensation for directors and top managers.
Ermotti, who heads Switzerland’s biggest bank, said regulations must be “meaningful” and “useful.”
“We have too much bureaucracy,” he said. “More and more laws are being created.”
Swiss banks lost a lobbying campaign last year to stop the government from adopting some of the world’s toughest capital requirements for banks. While Ermotti has said he supports the new rules, he’s also stressed that the new leverage ratio, a measure of debt levels, will hit the bank’s returns, ultimately hurting its ability to contribute to the wider economy.
“Finance is the locomotive of our economy,” Ermotti said. Companies small and large have benefited from “a strong financial system that backed everything and made capital available.”
In a separate forum event Friday, UBS’s Chairman Axel Weber said the bank has to deal with about 40,000 “regulatory events” every year.