European politicians have struggled to ease tensions with Turkey, Russia and Belarus – to name just a few recent issues. At the same time, the trade dispute between the United States and China is not fully resolved despite the signing of a “phase one” agreement.
In addition, there is a lot of focus on the winner of the US presidential election, scheduled for next month.
Ermotti, who joined UBS in 2011 and became managing director in 2014, believes investors will change their portfolio positions in the run-up to the vote.
“The surveys of investors, the surveys of clients that we do tell us that we will most likely see, in an election and after an election, a change in their asset allocation,” Ermotti told CNBC’s Geoff Cutmore.
He explained that investors will have to react quickly to different policies depending on who wins between incumbent President Donald Trump and his Democratic rival Joe Biden.
“You can have completely different tax plans and tax incentives implemented in certain ways in favor of certain sectors,” he said.
Looking at different geographies, Ermotti believes that there are greater opportunities for growth in the Asian and US markets, as Europe still lacks competitiveness.
Ermotti started at UBS at the height of the Eurozone debt crisis in 2011, which coincided with public anger at the banking industry for contributing to one of the worst financial shocks in history.
However, Ermotti believes that banks have learned their lessons and succeeded in improving their reputations in recent years, claiming that “banks are made of humans and humans are a reflection of society. I don’t think banks, in particular, (a) bad actor. ”
“Banks have demonstrated their ability to adapt and learn from our mistakes during the financial crisis. By the way, we weren’t the only ones making mistakes there, but today I think the image of the banks has improved dramatically, ”he said. .
Ermotti will leave the world’s largest wealth manager at the end of this month.