UBS CEO Sergio Ermotti Talks Market Volatility

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What insights does Sergio Ermotti share about current market volatility?

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Jonathan Ferro 0:40
Let's get out to Davos where Bloomberg surveillance anchor John Farrow is standing by. John, take it away. Hey, guys. Live from Davos, Switzerland, at the World Economic Forum, standing by the king of Swiss banking. He might not like that introduction. It's Sergio Aramotti, the UBS CEO. Sergio, good to see you. Hi. Thanks for braving the cold. I appreciate it. Before we get into the bank, we're going to ease into this and start with financial markets. We're going to start to the trading week stateside. Equities open up, gap lower, bond yields higher, dollar weaker.
Sergio Ermotti 1:08
we've seen this movie before last april got over it pretty quickly we've thrown a lot of this market in the last 12 months it hasn't stuck is there something different about the way we're set up for 2026 well i would say that it's probably the accumulation of issues that are now out there and not resolved that is becoming a little bit troubling in my point of view so i think that this is the only major change but we have to stay tuned for more volatility going forward and predictability and rapid changes. So I think that staying diversified in financial markets nowadays is pretty important.
Jonathan Ferro 1:46
And let's get to what that word means, diversify. It feels like that's a diplomatic way of saying South America sometimes. So I'm not going to put words in your mouth. I'll tell you what others are saying. PIMCO is talking about a multi-year period of diversification away from U.S. assets. We've seen from others moving out of U.S. treasuries. There was a headline earlier on this morning about a very small Danish pension fund. And they've got their own issues in Denmark right now, given their relationship with America. What are you seeing development?
Sergio Ermotti 2:11
Well, diversifying away from America is impossible. I think that in any major asset allocation, one could probably think about having an overweight or underweight, but diversifying away from the U.S. and also from the dollar is a quite dangerous bet. Things can change rapidly, and the US is the strongest economy in the world, the one who has the highest level of innovation. Right now it's a little bit bumpy, but I would say that I wouldn't really bet against the US.
Jonathan Ferro 2:43
difference between how the politicians and the policymakers talk about america right now in the backdrop for international relations and how a business person thinks of america the economy and the opportunity i've mentioned this stat a number of times already today about the survey that pwc put out they surveyed four and a half thousand ceos and the top destination for capital for investment america and it was up on last year as a bank boss right now a ceo who's thinking about expanding around the world why is us still top of mind for you
Sergio Ermotti 3:13
Well, because from our standpoint of view, we see two big levers. First of all, wealth creation, GDP growth, innovations, and also more idiosyncratic to UBS is that we see potential for us to become more present, increase our market share. So that's one place. On the other end, we are also very big in Asia. I mean, we manage one trillion of assets there. We are growing very fast. The economy is growing. You know, half of the population in the world is living there and is creating new wealth. But, you know, in the Americas, in the U.S., by the way, last year, the U.S. created 25 millions of new millionaires. So basically 1,000 millionaires a day. So it's a place for a financial institution, a wealth manager like UBS is a place to be.

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