UBS CEO Sergio Ermotti on Thursday warned that investors have grown complacent over the past few years, even as geopolitical and economic risks have mounted.
"There has been a level of complacency in financial markets in the last few years," Ermotti told CNBC's Christine Tan, adding that given the environment one would have expected considerably higher volatility.
While markets have experienced occasional bouts of turbulence, strong investment in artificial intelligence, data centers and other new technologies has helped support economic growth and financial markets, he said.
The UBS top boss cautioned that investors face an increasingly complicated environment given multiple headwinds. "New problems or new issues are emerging without any of the old ones being addressed or being closed."
Markets face a mix of Iran and Ukraine war-driven energy and shipping risks, add to that the U.S.-China rivalry that has strained supply chains, while rising borrowing costs and stubborn inflation have created headwinds for economic growth.