The multinational intergovernmental Organisation for Economic Cooperation and Development (OECD) has warned that UBS’s 2023 shotgun rescue deal of Credit Suisse has created “new risks and challenges” for the country.

In its latest economic review of Switzerland, the OECD said that while the deal may have safeguarded the Swiss economy in the short term, the organisation has concerns over UBS’s domestic dominance and a need for stronger financial regulation.

It said: “The acquisition of Credit Suisse by UBS effectively safeguarded financial stability but raises new risks and challenges.

“UBS – already a global systemically important bank before the merger – has become even larger and it has been given a transition period until 2030 to meet the progressively higher capital requirements of the “too big to fail” (TBTF) regulations.”

The report also raises concerns around competition in Switzerland and highlights the nation’s population which is “ageing rapidly”.

The OECD is the latest organisation to question the state-facilitated merger, with the Financial Stability Board, a group of central bankers, last month arguing that a failure of UBS would pose a major threat to the country.

The Swiss competition commission is reportedly set to launch a deeper investigation into USBs’s dominance of certain parts of the market, while the government is due to lay out proposals on how to toughen regulations covering big banks in the coming months.

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