WHEN: Today, Thursday, October 6th
WHERE: CNBC's "Squawk on the Street"
Following are excerpts from the unofficial transcript of a FIRST ON CNBC interview with Sergio Ermotti, UBS CEO, on CNBC's "Squawk on the Street" (M-F, 9AM-11AM ET) today, Thursday, October 6th. Following is a link to the story on CNBC.com: http://www.cnbc.com/2016/10/06/ubs-ceo-deutsche-bank-not-indicative-of-europes-banking-system.html. Following is a link to the video on CNBC.com: http://video.cnbc.com/gallery/?video=3000557170.
All references must be sourced to CNBC.
ERMOTTI ON EUROPEAN BANKS
Well look, the European banking sector is quite sound. I mean, we made huge progress in the last seven, eight years in addressing not only the capital position of banks, but also developing a better business models and trying to be sustainable. Of course, the macro environment is not very constructive for banks. Low rates, negative rates are putting a lot of pressure on profitability.
ERMOTTI ON EUROPE
European banks are suffering because of the macro economic conditions of Europe. The lack of growth. Low rates or negative rates are clearly putting a lot of pressures. There's also a huge over capacity in the European system. So that's the problem, but I wouldn't call it something that people should be concerned in terms of the stability of the financial system.
ERMOTTI ON DEUTSCHE BANK
I wouldn't look at one idiosyncratic situation as being a good proxy for the entire banking industry. I think it's a matter of fact that capital positions and being increased by seven, eight times in the last few years.
ERMOTTI ON BREXIT
London lost attractiveness in the last few years for sure. I would call it – it's going to continue to be a very important financial center for sure. But depending on how they resolve the issues of passporting from London into the rest of Europe, it will determine the next phase. I mean, I can't imagine London keeping the same status as they have today if there is no passport into Europe.
ERMOTTI ON NEGATIVE RATES
There are collateral damages that are created for sure. Lack of confidence by consumers and investors. Potential bubbles coming in certain asset classes. Stock market. But also the real estate market.
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