Mergers among European banks won’t help their business, according to Credit Suisse chief executive officer Tidjane Thiam.
“Negative interest rates make for a very difficult environment, in which many banks come under intense pressure in the long term,” the CEO was quoted as saying by Swiss newspaper Sonntagsblick. “A merger wouldn’t do any good.”
What’s needed instead are reforms to pensions, healthcare and education to improve the economic environment and generate growth, he said.
The monetary policy of Switzerland’s central bank consists of a negative interest rate of minus 0.75% plus a pledge to intervene in currency markets, if needed, to stem appreciation pressure on the haven franc and maintain adequate monetary conditions. Banks blame the ultra-low interest rates for crimping profitability.
“I’m not criticising the central bank,” Thiam told the newspaper in response to a question about whether the Swiss National Bank should change its policy. “I’m simply say that the negative rates are having a negative effect on the economy.”
Thiam said he had no plans to switch jobs and that he wasn’t going to go into politics.
Concerning the US-China trade dispute, Thiam said a compromise between the two parties was needed but that “in the short term, I’m not very optimistic” about that happening.