The proposal, drafted by the Council of States' Economic Affairs and Taxation Committee, seeks to resolve a long-standing impasse between government regulators and the nation’s sole universal bank. UBS contends that mandating 100% equity backing would place it at a distinct disadvantage compared to international peers. By advocating for the inclusion of AT1 bonds, the bank maintains that it can trigger stabilizing measures, such as dividend suspensions or bonus cuts, more efficiently than through pure equity requirements alone.
UBS Pushes for Compromise on Swiss Capital Requirements
Three years after the emergency acquisition of Credit Suisse, UBS is lobbying Swiss lawmakers to accept a compromise on capital buffers. The bank argues that allowing a 50/50 split between equity and Additional Tier 1 bonds for foreign subsidiaries offers taxpayer protection while maintaining the firm's global competitive edge.
According to the bank’s latest position paper, the 50/50 model would have surfaced Credit Suisse’s structural instabilities as early as 2021. UBS asserts that these instruments serve as a critical early-intervention tool capable of converting into Common Equity Tier 1 capital instantaneously during a crisis. As the debate continues in Berne, the lender warns that overly aggressive regulatory mandates risk damaging the broader Swiss financial sector, balancing these fiscal concerns against the persistent shadow of the 'too big to fail' doctrine that necessitated the 2023 takeover.
Comments (0)
No comments yet. Be the first!