Swiss parliamentary committee postpones decision on stricter UBS capital requirements to August 31, post Credit Suisse Too Big To Fail regulation
A Swiss parliamentary committee postponed its decision on stricter capital rules for UBS $UBS Tuesday, pushing debate to August 31. At stake: a government plan requiring UBS to fully back foreign units with roughly $20 billion more in top-quality equity capital.
A Swiss parliamentary committee failed to reach a deal Tuesday on new capital requirements for UBS $UBS, postponing further debate to August 31, according to comments from committee member Fabio Regazzi reported by Swiss outlets and confirmed by wire reports. The Economic Affairs and Taxation Committee of the Council of States, the upper house of the Swiss parliament, is weighing a government proposal drafted after the 2023 collapse of Credit Suisse that would require UBS to fully back its foreign subsidiaries with Common Equity Tier 1 capital, its highest-quality form of equity. Estimates put the additional capital UBS would need to hold at roughly $20 billion. Some lawmakers are pushing a compromise that would let UBS meet part of that requirement with cheaper Additional Tier 1 capital instead, softening the government's original plan. The committee will resume debate on August 31, and a vote by the full upper chamber now looks unlikely before September. The delay extends regulatory uncertainty for UBS, Switzerland's sole remaining globally systemic bank since it absorbed Credit Suisse, and keeps open the question of how much of the tougher post-crisis capital regime the bank will ultimately have to hold.