Banking Union

UBS to Create First European-Wide Bank

Picture Source: Bloomberg
  • Why it matters

    Why it matters

    Consolidating all E.U. operations under one roof could save UBS billions of euros and potentially open the door for other European banks to do the same.

  • Facts


    • UBS plans to consolidate its 11 banking licenses across the European Union into one “E.U. Passport” valid for the entire 28-nation zone.
    • Analysts estimate the bank could save between €2-3 billion in reduced capital requirements alone.
    • Frankfurt is the front-runner to become the headquarters of the new E.U. subsidiary.
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Switzerland may not be in the European Union, but the country’s largest bank is about to become a pioneer in the 28-nation bloc.

UBS is pledging to merge its E.U. operations into a European-wide subsidiary — perhaps based in Frankfurt, Germany’s banking capital, Handelsblatt has learned.

That would make Switzerland’s largest bank, ironically based in a country outside the European Union, the first major financial institution to use new banking rules designed to create a common E.U. market for banking services.

The Swiss bank’s decision marks the clearest signal yet that a major consolidation is afoot in Europe’s financial industry. The introduction of common rules for the 19-nation euro currency zone and the promotion of the European Central Bank as the primary banking supervisor for the continent, have fed speculation that consolidation could be imminent.

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