Switzerland's top central banker said Saturday that a mounting call to limit bankers' pay was "senseless", as such action could spark an outflow of talent from the sector here.
"If the state starts to define salaries, that would be counterproductive. To say that a banker should not make more than a specific amount is for me senseless," said Swiss National Bank chairman Jean-Pierre Roth in an interview with Swiss newspaper Neue Zuercher Zeitung published Saturday. He warned that such a move could lead to talent "leaving for banks abroad or for unregulated institutions." Any revisions of salary structures should still remain competitive with foreign banks, he said.
"Excesses must be corrected, but in line with countries elsewhere," he said. Swiss politicians have expressed outrage at bankers' remuneration after the country's biggest bank UBS lost billions in the ongoing financial crisis and was forced to turn to the government for help worth almost 60 billion dollars.
It led the government to say earlier this week that "the statutes of companies listed on the stock exchange should detail how the remuneration of management board members are fixed."
Roth also expressed concern about the rapidly gaining Swiss franc which could have an impact on the country's exports. The Swiss franc earlier this week hit a historic high against the euro as investors turned to a traditional safe haven currency amidst market turmoil. "What is problematic is the dynamic of this rising price. The private sector is having difficulties adjusting to the sudden movement, and that is the real problem," said Roth.
At the same time, he said that he was more worried about the economy now than a month earlier, as "the situation has deteriorated, because the financial crisis is still gripping the real economy." However, the central banker would not say if there would be a recession in the coming year.