From Yahoo Finance: 2025-06-09 08:19:00

The Swiss government has proposed new capital norms, requiring UBS to boost core capital by $26bn post-acquisition of Credit Suisse to enhance financial stability and prevent banking crises. UBS has 6-8 years to comply. The move aims to reduce AT1 bond holdings by $8bn and align with global standards, though UBS opposes the “extreme” requirement. Executives fear competitiveness and impact on Switzerland’s financial hub status.

The collapse of Credit Suisse in 2023 prompted Swiss officials, including Finance Minister Karin Keller-Sutter, to advocate for stricter regulations. Keller-Sutter emphasized the necessity of measures to safeguard taxpayers and the economy, citing the stability of the financial sector. The federal council plans to present draft proposals for stakeholder consultations in the latter half of 2025, aiming for parliamentary approval before laws take effect in 2028, with potential implementation as early as 2027.

UBS may see its Common Equity Tier 1 (CET1) capital ratio rise from 14.3% to 17%, surpassing global competitors. The proposed capital increase, which UBS disagrees with, could require holding an additional $24bn in CET1 capital. The Swiss government also proposed reforms to strengthen the market regulator FINMA and enhance banks’ access to liquidity from the Swiss National Bank.

In a related development, UBS Group agreed to pay $511m to settle a US investigation into its subsidiary, Credit Suisse Group, for enabling tax evasion among wealthy Americans. The Swiss proposal aims to fortify UBS’s financial standing and mitigate risks in the banking sector.



Read more at Yahoo Finance: Swiss proposal mandates UBS to boost capital by $26bn