Swiss lawmakers reflect shift on banks with UBS capital decision
UBS•Switzerland’s upper house voted to require UBS to back its foreign units with 90% Common Equity Tier 1 capital, rejecting a less costly proposal. The lower house still must debate the plan.
1. Upper house backs tougher rules
Swiss lawmakers voted to require UBS to back its foreign subsidiaries with 90% Common Equity Tier 1 capital. The vote went further than many political analysts had expected and rejected a compromise that would have allowed the bank to use 50% CET1 and 50% Additional Tier 1 capital.
2. Public pressure and lobbying
A June poll found 79% of respondents supported tougher capital requirements, even if UBS paid lower dividends or accepted less growth; 9% opposed them. UBS Chairman Colm Kelleher warned the bank might reconsider its future in Switzerland if rules were too harsh, while CEO Sergio Ermotti called the 90% proposal excessive.
3. Lower house still to debate
The lower house must still debate the capital plan drawn up by Finance Minister Karin Keller-Sutter after Credit Suisse’s collapse. UBS said the vote disregarded concerns expressed by business representatives, employee associations and most Swiss cantons.
