Welcome to Bloomberg House, which you were just admiring and saying you helped pay for the budget. We were just talking earlier about how difficult it was to invest in Europe. You look at the year you've had and particularly the times that you took over Credit Suisse. Most people would say that was one of the great bargains of banking. Your share price has risen by more than 80% now, the highest since 2008. And you are now Europe's most valuable bank. So well done on that. But the first thing in terms of the year ahead is a man called Donald Trump has arrived in Washington. And I wondered, you know, you are based in Switzerland. Switzerland is still a pretty open country in terms of trade. What do you do? Do you worry about what he will do in terms of tariffs and trade?
Yeah, thank you for that. Let me just take an exception on your bargaining issue. So I think it's a, you know, if you add up the true cost of the acquisition, you will see that's the 3 billion headlines we paid for. You had to work out, but at least another 15 to 17 billions for the restructuring and therefore it will be eventually a good transaction and it takes time to make it work.
That's always the best sign of a banker when he denies he's done a brilliant deal. Thank you for that.
Now, look, Trump, the new administration. First of all, I have to say that like everything when it starts, there is a lot of promises, a lot of ambitions, a lot of promises they make. And we'll see how much is really going to come down effectively. I do hope at the very least that the new administration can deliver on its agenda. On the geopolitical point of view, to bring peace or ease tensions not only in the east part of Europe, but also looking at the Middle East and also normalize relationships with China. Of course, on the other side, the tariff topic, it's something that is quite potentially dilutive to any deregulation or easiness for doing business. So I take a positive but also balanced approach on the new administration.
Anything particularly on banking that you're looking for? There's been a lot of talk about deregulation. Everyone's share prices have gone up. But do you think there's one particular thing that you'd like Trump to change in terms of what some people see as the overregulation of banking in America?
Look, I think that the real, true, honest assessment is that the new administration is unlikely to put new regulation, which for the banking industry is already an achievement. Right. So new regulation and particularly regulation that goes in conflict with the existing regulation. So hopefully we will see some simplification in terms of avoiding overlapping tasks by different agencies in the U.S. That would be a welcome move. I don't believe honestly that we should have a huge amount of deregulation for larger banks. I think that if you look back at COVID and any crisis, big banks now are strong, are able to step in and be part of resolving issues rather than being the one that creates issues. So I wouldn't really welcome a huge wave of new regulations. What I can see is that, of course, what happened in the U.S. doesn't mean automatically that you will see in Europe or in Switzerland or in Asia deregulation. So the fact is, U.S. banks may become even more competitive internationally through a more benign environment.
Just come back to that in a second. That idea that others may have to follow. But just one particular thing that's already happened in your industry is you have a variety of banks. JPMorgan, Goldman Sachs, Bank of America, they've all left the Net Zero Banking Alliance. So you're going to do that. There seems to be a general retreat from that sort of thing.
Yeah. Look, you know, I think that we have to carefully analyze the situation. We also want to see exactly what defense is going to come up with in response to that. It is fair to say that the last few years, you know, the ambition should remain the same to help contain climate change and go towards a net zero. The reality is that it is not possible and it's not credible to think that you can do it at the same pace and the same extent in every single country and region in the world. So that one is a major issue. The second one is, which I have to say, I always question and challenge. The financial services industry is not the policeman of politicians. Politicians have to take clear, coherent views on the matter and not try to ask banks to act as a policeman. So we are committed to help clients and society to achieve those targets. But we also believe that taking too much of an excessive position on denial or unrealistic short term ambitions is not the way to help. We believe helping the transition is the most fundamental part of the equation. We need to free up resources to help the transition, and that's the reason why banking is part of this, of the solution. But you shouldn't be the policeman. No.
You mentioned earlier just that idea that there might be pressure on European regulators. Many people would hope there would be a change. You are exactly. You are actually quite a good example of somebody who's got a problem in that respect because you've got the Swiss government now talking about putting even more capital charges on you. I think you already have to do 20 billion to do with bail and the existing regulation, but you now might get another 25 billion because they're talking about making you apply capital to all your overseas subsidiaries.
Well, look, first of all, I have to say that we do agree with many of the proposals of the Swiss government in respect of taking the lessons learned from the Credit Suisse failures. We believe it's quite clear that Credit Suisse went down because they had a very bad business model. They were mismanaged for too many years. That's the crude reality. And also, they benefited from incredible regulatory concessions over the years. And so we believe that a balanced approach in assessing what needs to be fixed versus what happened, where all stakeholders recognize their negative contribution to what happened, is the right solution. Putting more capital will only make us less competitive, less able to help our clients to grow, is going to make banking services more expensive, and is not going to definitely help fostering a competitive financial centre. So we hope and believe that a proportionate outcome should be the solution.
But do you think you can get away with not having to put 100% capital against these foreign subsidiaries? That is the... I don't know. I think that's really still quite a complex discussion.
We are working at working level. We are trying to present the case for why it is totally unnecessary and incredibly penalizing to say that a foreign participation is worth nothing on your balance sheet. That's an extreme overreaction that will not really help foster Switzerland as a leading financial centre if you're being punished for being Swiss.
There has been talk of you moving your listing from Zurich to New York. Why not take advantage of this much better regulation somewhere else?
So I think that we are not punished for being Swiss. We are punished for being part of the solution. So which is quite... so you would be using the concept, you would be punished less if you were in America? No, but look, this thing is not the major factor. It is where you are domiciled and who is your leading regulator that matters. So the regulatory framework is the Swiss one. Swissness is helping us, it's quite differentiating elements. The Swiss business is one of the pillars of our strategy. We want to continue to be successful operating out of Switzerland. We will make our case till the last minute in making sure people understand not only the risk we may pose, but also the benefits we create for the country. And when that happened, then politicians should take their decisions about the future. So I don't think for me, a topic to even consider at this stage to move away from Switzerland.
What about the European Union? In all this time, we have all been waiting for a banking union, for all these things that Mario Draghi had them in his report. Is Trump the wake up call finally for Europe to look at having banking across the European Union?
Well, I think Europe seems to look like a bear sleeping during the winter. So I don't know how many wake up calls they need in order to. I mean, today probably with this, it's a year, the warm weather, maybe some of them are waking up suddenly. But if you look at my view, I thought that way when Brexit happened. I thought Europe would be the wake up call for Europe. I tried to, you know, so honestly, one can hope that Europe understands that being more strong and independent and thinking about defence, I would say that is a fair comment that President Trump is making about Europe putting more money behind defence. But I think that Europe should develop its own defence and not rely so much on the U.S. for its own defence. So by the way, that's also a good way over the years to develop innovation. So at the end of the day, I think that's hopefully a wake up call. But I'm not so convinced that the current state of Europe will allow that to happen. Too much fragmentation, still too many parochial views on the matter.
