Swiss parliament panel fails to reach deal on UBS capital rules
Some lawmakers want to soften tougher rules drafted by the government after Credit Suisse’s collapse
On August 11, a Swiss parliamentary committee was unable to come to a consensus on proposed new banking regulations for UBS, following the collapse of Credit Suisse. The draft Bill would require UBS to hold approximately $20 billion in additional Common Equity Tier-1 capital (CET1) to prevent future banking crises and protect taxpayers.
However, UBS contends that the requirement is excessive and could harm its competitiveness and damage Switzerland's banking sector. The Bill is currently being reviewed by the economic affairs and taxation committee of parliament's upper house, where lawmakers are concerned the measures are too burdensome and have proposed amendments to reduce the capital requirement for UBS.
After Tuesday's unsuccessful attempt, the committee will reconvene on August 31. The bill aims to fully capitalise UBS's foreign subsidiaries, currently at 60%, using CET1 capital alone, though part of the requirement could be met with less costly forms of capital like Additional Tier 1 (AT1) capital. Lawmakers have also discussed strengthening AT1 instruments by introducing a higher regulatory trigger point, which could require UBS to suspend payouts to investors if its capital ratio falls below a certain threshold. However, the details of how these measures could work are still being resolved.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
