Davos - UBS
Group Chairman Axel Weber said executives and policy makers gathering this week
at the World Economic Forum in Davos are too gloomy after the recent resurgence
of populism around the world.
“I’m quite
optimistic” about 2017, Weber, the former head of Germany’s Bundesbank, said in an
interview Tuesday with Bloomberg TV’s Francine Lacqua. “Usually when I come to
Davos, I find everyone is too optimistic. This time around I think the mood is
a bit too gloomy.”
Almost 10
years after the financial crisis, the global economy has stabilised, Weber
said. In the US, the Trump administration is taking over a “dynamic” labour
market that should help set the stage for further growth. Fiscal measures outlined
by the new administration will shift the policy focus away from monetary
stimulus to government spending, he said, allowing for a gradual increase in
interest rates.
Tidjane
Thiam, who runs cross-town rival Credit Suisse Group, said such a move should
benefit banks this year, after they struggled with negative or ultra-low
interest rates since the end of the 2007-2009 crisis.
Thiam’s outlook
“There is
an expectation that ’17 will be better than ’16,” Thiam said in a separate
interview. “You have a number of things going in that direction, certainly
interest rates.”
Both banks
have cut jobs and scaled back investment banking amid tighter capital
requirements. Thiam said Tuesday that he expects more cost cuts this year in
the global-markets division, “but it’s not that material.” His cost-cutting
program will bear fruit in 2018, the CEO said.
Read also: WEF2017: Radebe appointed to WEF board
“After a
year in ’16 where you saw revenues go down,” Thiam said, “hopefully ’17 will be
better,” though it will depend on the market.
Weber said
UBS, which cut back its investment banking after the 2008 financial crisis to
focus on wealth management, is looking for “targeted acquisitions” to expand in
Asia and the Americas.
“I think
the chances here in Davos are” that participants “are going to see more
chances, maybe more than in the previous years,” Weber said.