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We need global champions, in the economy and among banks. “And Italy can do its part.” Sergio Ermotti, 63 years old, well behaved, has a calm but decisive manner. Vivid look, shirt unbuttoned, the highest paid banker in Europe – thanks to a record salary of 14.7 million dollars in three quarters – is sitting on the 20th floor of the Italian headquarters of UBS, in Milan. Arriving for a “two days” dedicated to meeting the elite of business – listed and unlisted – and of Italian high finance, the Ticino banker speaks to Il Sole 24 Ore. And as number one of the Swiss bank, the largest in the world for assets under management, with over 5 trillion dollars in its portfolio and a presence in 50 countries, in this exclusive interview he talks about his view on global markets, Europe and the ‘Italy. And about the challenges he sees on the horizon, including the recipe for overcoming them.
Let’s start from the global scenario. From geopolitical tensions to the expected monetary normalization, there is no shortage of uncertainties. Worried?
I struggle to remember a time in the last 10-15 years when visibility was supported by clarity. Emotions and uncertainties weigh heavily on the market, primarily linked to geopolitical and military events. But there is also a mistaken expectation, or rather an illusion, that rates can fall suddenly. However, the reasons that generated inflation are still there, starting from the enormous mass of liquidity on the market.
So rates won’t fall soon?
They will do it but I don’t think quickly. And in any case, a return to rates prior to the 2021-2022 surge is not realistic. 10-year dollar rates are unlikely to fall below 3.5%. If we look at stocks instead, this lack of volatility makes me perplexed. Is it a sign of complacency or calm before the storm? The answer is not clear.