New capital requirements for Swiss banks will slow growth at UBS, says finance minister

Apr13,2024



Zurich: Swiss government has proposed more strictness capital requirements UBS for banking industry, the country's growth potential will be affected Finance Minister said in an interview published Saturday.
Switzerland's largest bank will have to hold more capital if regulatory packageThe measures announced Wednesday have been put in place to prevent a repeat of the Credit Suisse collapse, Karin Keller-Sutter told Aargauer Zeitung.
“In short, development will become more expensive,” he said.
The proposed changes target the country's four largest banks, with 22 measures and more than 200 pages of recommendations on how to supervise banks deemed “too big to fail” (TBTF).
The government aims to quickly implement the measures and introduce two packages for implementation in the first half of 2025.
Among the measures, Keller-Sutter highlighted the proposal to see how the Swiss parent companies of UBS and the country's other systemic banks would have to return their foreign stakes to 100% equity in the future, up from 60% currently.
“If we adjust this regulation now, it will have an impact on the growth and size of UBS,” he said.
He said this requirement would also make it easier to deal with authorities abroad in case of crisis.
One analyst estimated that UBS may need to maintain additional capital of $10 billion to $15 billion compared to current capital.
In the interview, Keller-Sutter again criticized UBS CEO Sergio Ermotti's pay package, which stood at 14.4 million Swiss francs ($15.75 million) last year.
“UBS is hurting itself this way,” he said.



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