'The only way to regain trust on a sustainable basis, is to separate the investment bank from the retail and private- banking units'.
'The integrated model may, from an intellectual point of view, still be the superior one, and this may explain why the present managements defend it stubbornly. But it is outdated in terms of what can be sold to customers and the public'.
'The highly volatile and accident-prone investment banking business imports risks into the retail and wealth-management units, where clients are more conservative with their money'.
'This is a good time to proceed with the separation. Bank shares are trading around book value, and investors are no longer paying premiums above it since all the hype in the market has gone. There are few who believe in a great future for investment banks; hardly anyone thinks that Swiss universal banks are good at running integrated investment banks. Whichever bank announces such a split is more likely to be rewarded by the markets, rather than punished.hardly anyone thinks that Swiss universal banks are good at running integrated investment banks. Whichever bank announces such a split is more likely to be rewarded by the markets, rather than punished'.
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The article appears just a few days after JP Morgan analyst Kian Abouhossein suggested that Credit Suisse and UBS might be better off merging their investment banking divisions and spinning them off.
image: © Nesster