Swiss finance minister warns new capital requirements will hinder UBS growth

Swiss finance minister warns new capital requirements will hinder UBS growth

ZURICH (Reuters) – Tighter capital requirements proposed by the Swiss government for the banking sector will impact UBS’s ability to grow, Switzerland’s finance minister said in an interview published on Saturday.

Switzerland’s largest bank will have to hold more capital if regulatory measures announced on Wednesday to avoid a repeat of the Credit Suisse collapse are implemented, Karin Keller-Sutter told the Aargauer Zeitung.

“In short, growth will become more expensive,” she said.

The proposed changes target the country’s four largest banks with 22 measures and more than 200 pages of recommendations on how to control those deemed “too big to fail” (TBTF).

The government intends to implement these measures quickly and presents two packages of measures to be implemented in the first half of 2025.

Among the measures, Keller-Sutter highlighted the proposal to change the way in which the Swiss parent companies of UBS and the country’s other systemic banks must in future support their foreign participations with up to 100% equity. , compared to 60% currently.

“If we adapt this regulation now, it will have consequences for the growth and size of UBS,” she said.

This requirement would also facilitate relations with foreign authorities in the event of a crisis, she added.

According to one analyst estimate, UBS may need to retain between $10 billion and $15 billion in excess capital, compared to what it currently holds.

In the interview, Keller-Sutter again criticized UBS CEO Sergio Ermotti’s salary, which last year amounted to 14.4 million Swiss francs ($15.75 million).

“UBS is thereby harming itself,” she said.

($1 = 0.9140 Swiss francs)



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