Wednesday 20 November 2019 5:13 pm | Updated: Wednesday 20 November 2019 8:07 pm

Risky business: UBS warns that tax on billionaires will kill off risk appetite

A Chinese bank worker prepares to count a stack of US dollars together with stacks of 100 Chinese yuan notes at a bank in Hefei, east China’s Anhui province on March 9, 2010. All signs are pointing to an appreciation of China’s currency, perhaps even by mid-year, analysts say, after a cryptic hint from the nation’s central bank governor and a limited jump in the yuan’s value. CHINA OUT AFP PHOTO (Photo credit should read STR/AFP via Getty Images)

Billionaires will stop taking risks and sit on their money if they face blockbuster wealth taxes being proposed by left-wing politicians on both sides of the Atlantic, a top UBS banker for the super-rich has warned.

Josef Stadler, who heads up the ultra high net worth division at the Swiss bank, has claimed that billionaires will no longer chase high returns if they face the types of levies being proposed by Democrat candidate Elizabeth Warren and Labour leader Jeremy Corbyn.

“What will happen is worse than billionaires relocating,” Stadler told City A.M.

He added: “They will say: ‘if you cap my upside, then I cap my risk appetite’. And in the long term, there will be no risk appetite”.

Curbing billionaires’ riches has become one of the key pledges in both Warren’s campaign to become US president and Corbyn’s bid to be elected Prime Minister.

The proposed wealth taxes have prompted a number of super-wealthy figures including former Goldman Sachs boss Lloyd Blankfein and JP Morgan chief executive Jamie Dimon to publicly express their concerns.

However, a recent survey from YouGov found that anti-billionaire sentiment is broadly popular among Brits, with a little over half of respondents saying that nobody should have £1bn under any circumstances.

According to Stadler, it is not just political pressure but also wider headwinds in the global economy that are giving the ultra-wealth a headache.

“For the first time I’ve seen in 10 years, billionaires are more concerned than millionaires,” said Stadler.

“Historically, big money knows more than not-so-big money and is a leading indicator for capital markets and recessions… billionaires are an indicator of what will come, such as a potential cooling off of economic activity and a hardening of geopolitics”.

The UBS banker said that unpredictable tweets from President Donald Trump and a flip-flopping over interest rates have contributed to billionaires turning their backs on global public markets after a volatile year.

Over the coming year Stadler expects there to be a rise in “stealth wealth”, in which wealth is less obvious to spot because it is increasingly moved from public listed firms into private investments.