UBS cautions Switzerland on capital rule tightening

UBS CEO Sergio Ermotti warned Swiss legislators against imposing overly strict capital rules on the bank ahead of the crucial parliamentary vote. It is expected that UBS will be asked to increase its capital by around $20 billion following the collapse of Credit Suisse in 2023. He explained that the government proposal requiring the bank to fully cover its foreign units with 100% of the approved capital is excessive, pointing out that compromise solutions covering 50% to 90% of the CET1 capital would be less costly. However, significantly tightening the rules could harm the bank’s ability to compete and threaten its future in Switzerland. Nonetheless, he cautioned that increasing capital requirements could impact clients and employees, and that stricter regulations might impede UBS’s competitiveness and threaten the bank’s stability after the Credit Suisse crisis.

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