Simon Johnson: belief

Transcript context

…Well, Switzerland now has one really big bank, bigger than it had been a week ago. Should the Swiss be more worried? Should they split it up? What’s the equilibrium here? It’s moved against the direction you want. Right, absolutely. I think they should be very careful and supervise that bank extremely carefully. Of course, part of why UBS is so big — it has very large wealth management, and if wealth management is run properly, it’s basically a custodian with fees for rich people. When you strip that out, I think their total balance sheet is a bit more than the reserves that the Swiss National Bank has, but they still have strong enough national balance sheet and a credible enough central bank. Let’s not forget the swap lines with the Fed, Tyler — really important in this context to be able to support banking systems. Not that many people have open unlimited swap lines so they can access double liquidity whenever they want, but the Swiss do. Sure, but if you believe in splitting up the big banks, isn’t that the first place you should look, and the Swiss, say, two months from now, should turn around and split up UBS into three, four, five different parts? Or do we give up on the idea? What do you consider? What’s your view?…

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