Swiss Finance Minister Karin Keller-Sutter has expressed concern that the national debts of the United States and Europe pose a significant risk not only to Switzerland but to the entire world.
In an interview with the Swiss newspaper Blick, Keller-Sutter praised Switzerland's "disciplined" financial management, which she believes has enabled the country to navigate the economic challenges caused by the COVID-19 pandemic and Russia's aggression against Ukraine. In contrast, she noted that other countries are so heavily indebted that they can hardly take action. She cited France as an example of this financial strain."Or take a look at America. It's a ticking time bomb. The small stock market crash at the beginning of this month was a warning shot. It was a sign of investors' fear of a recession. The debt in the U.S. and Europe is a risk to Switzerland and international financial stability," Keller-Sutter stated.
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Keller-Sutter also discussed the Swiss government's proposal for UBS to maintain higher capital reserves following its acquisition of the former rival, Credit Suisse, after the latter's collapse last year. She justified the additional demands as necessary to protect Switzerland from another banking crisis, according to a report by Reuters.
Keller-Sutter's remarks underscore the global interconnectedness of financial systems and the potential ripple effects that excessive debt in major economies could have on countries like Switzerland. Her comments serve as a reminder that even nations with strong financial discipline are not immune to the risks posed by the fiscal mismanagement of others.