US outlook is bullish though don't expect rollback of regulation: UBS's Axel Weber

Axel Weber, UBS chairman and a former policymaker at the European Central Bank, told CNBC that he was bullish on the outlook for the U.S. but there would be little chance of a "full rollback" in banking and financial regulation.

Weber, who was a member of the European Central Bank Governing Council from 2004 to 2011, told CNBC Wednesday that investors should not price in an overhaul of regulation. Investors have been keenly watching President-elect Donald Trump for any clue on what his financial policies might be - including a repeal of the Dodd-Frank act.

"We are probably overshooting, at this point in time, the need for some of this re-regulation so there will be adjustment around the edges."

"I don't expect a full rollback of regulation… but I expect much less regulation to come," he added.

The UBS chairman has spoken on numerous occasions of his belief that in comparison to the U.S., Europe is far too reliant on monetary policy to solve the continent's problems and should place much more of an emphasis on fiscal policy instead.


'It's politics stupid'

The UBS chairman has spoken on several occasions of his belief that, in comparison to the U.S., Europe is far too reliant on monetary policy to solve the continent's problems and should place much more of an emphasis on fiscal policy instead.

However, Weber argued that political uncertainties with volatile consequences in the financial markets are no longer a phenomenon for just emerging markets. The industrial world is now just as vulnerable to political events causing a lasting impact.

"We have seen two sobering events (in Brexit and the U.S. elections) where we all need to be humbled about the use of projections and polls to predict the right outcomes of political events," said Weber at a conference hosted by UBS.

"A lot of investors used to say 'it's the economy stupid'. I would now say we are in a world where 'it's politics stupid' because political events matter… and they have very long-dated consequences on where economies go," he added.


Global investment

Weber concluded that due to the euro area being so vulnerable to political uncertainties both now and in years to come, the U.S. and Asia would would become more attractive for global investment.

The ongoing Brexit saga, a fast-approaching constitutional referendum in Italy on December 4 and elections in Germany next year all contribute to investor interest in U.S. equities instead, the UBS chairman said.