ZURICH (Reuters) -The Swiss upper house on Monday rejected a plan to submit all incoming UBS capital rules to parliament, clearing the way for the government to directly issue measures that could increase UBS’s core capital requirements by some $9 billion.
Under a plan to make the bank less risky, the government in June said UBS should no longer be able to count software and deferred tax assets as part of its required core capital.
The government estimated this would increase the bank’s capital requirements by around $11 billion, while threshold adjustments would reduce it by at least $1.8 billion.
The government would mandate this change directly via so-called ordinance measures, which would set a floor of additional capital requirements for UBS within broader demands centring on capital it must find to back its foreign subsidiaries.
In total, the requirements set out by the government envisage UBS needing to find up to $26 billion in additional core capital overall to ward against potential crises.
The measures are part of a plan that aims to tighten Swiss banking rules following the 2023 collapse of Credit Suisse, which was subsequently acquired by UBS.
UBS has criticised the new capital proposals, arguing they are not proportionate and risk putting the bank at a disadvantage against international competitors.
Just weeks after the proposal was presented, parliamentary committees challenged the procedure, requesting that all new capital rules on Switzerland’s remaining big bank should be considered as one comprehensive package by parliament.
This plan failed on Monday, when a vote of the entire upper house followed the lower chamber in burying the motion.
(Reporting by Ariane LuthiEditing by Dave Graham)
