Swiss Upper House Backs Tougher Capital Requirements for UBS

Switzerland's upper house of parliament has backed tougher capital requirements for UBS, the country's largest bank, according to Anadolu Agency. Under the measure, UBS would be required to cover 90% of the value of its foreign subsidiaries with high-quality equity capital.

The move reflects ongoing efforts by Swiss lawmakers to strengthen the resilience of the country's banking sector following the 2023 collapse and subsequent state-brokered takeover of Credit Suisse by UBS, an event that significantly increased UBS's size and systemic importance within the Swiss financial system.

Strengthening Bank Resilience

The proposed capital requirement is intended to ensure that UBS holds a substantially larger buffer of high-quality capital against its international operations, reducing the risk that problems at foreign subsidiaries could threaten the stability of the parent bank or the broader Swiss financial system.

UBS has previously expressed concern that significantly higher capital requirements could affect its competitiveness relative to international rivals. The bank's response to the upper house's decision was not detailed in the available reporting.

The measure will need to complete further steps in the Swiss legislative process before taking effect. The timeline for final approval and implementation was not specified in the available reporting.