Swiss Groups Pressure Parliament Over UBS Capital Rules

Swiss lawmakers are preparing to vote on tougher capital requirements for UBS, introduced after the bank’s emergency takeover of Credit Suisse in 2023. The government wants UBS to back its foreign subsidiaries with 100% Common Equity Tier 1 capital, a measure it says would strengthen the bank and protect taxpayers but that UBS estimates would require about $20 billion in additional capital. UBS rejects both the government’s proposal and a 90% CET1 alternative as damaging to its competitiveness, while supporting a parliamentary compromise allowing half the requirement to be met with less costly Additional Tier 1 bonds; UBS estimates that option would require about $13 billion in additional capital. CEO Sergio Ermotti and Chairman Colm Kelleher say even the compromise would be painful but manageable, warning that higher costs could affect customers and employees as well as shareholders. Swiss business groups are backing the compromise, arguing that stricter rules could raise companies’ financing costs and reduce the availability of credit and capital-markets services, while supporters of tougher requirements emphasize the need to prevent another banking crisis.