UBS could face higher capital rules under Swiss reforms
UBS Group faces a “substantial” increase in regulatory capital requirements under reforms that the Swiss government is advocating for in the wake of the collapse of Credit Suisse.
The Federal Council is proposing that systemically important Swiss banks must hold significantly more capital against their foreign units, according to a wide-ranging report on banking stability it released Wednesday. In addition, bank-specific capital levels should be boosted to take future risks more into account.
UBS shares fell as much as 3.6% and were briefly halted in Zurich trading.
The proposals are part of a sweeping response to Switzerland’s most severe financial crisis in over a decade, addressing a weakness that helped accelerate Credit Suisse’s demise last year. They also effectively single out UBS as the country’s sole globally systemic lender, setting the government on a collision course with executives who have pushed back against such a plan.
“Under the currently applicable requirements, the UBS parent bank must provide 60% capital backing for participations in a foreign subsidiary,” the government said. “The Federal Council is aiming for a significant increase in this capital backing,” leading to a substantial increase in overall requirements, it said.
UBS declined to comment on the changes. The capital rules also would apply to Switzerland’s other systemically important banks — Raiffeisen Group, Zuercher Kantonalbank, and PostFinance — though those institutions have a much lower international presence than UBS.
The government can implement changes in the capital regime without further parliamentary approval. The implementation of the relevant ordinance would take place in 2026 at the earliest, according to a government
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