ZURICH (Reuters) -Capital requirements for UBS should not exceed those in other major financial centres, a Swiss parliamentary committee said on Tuesday, increasing pressure on the government to ease part of proposed rules that do not require lawmakers’ approval.
The remarks by the lower chamber’s influential economic affairs and taxation committee follow parliamentary hearings with top UBS executives, leaders of the Swiss National Bank and the head of financial market regulator FINMA.
“The tightening of regulations must ensure a competitive cost-benefit ratio for the Swiss capital regime,” the committee said in a letter to the government.
Under a plan to make Switzerland’s remaining big bank less risky and avoid another Credit Suisse-style meltdown, the government in June laid out plans that could force UBS to hold $26 billion more in core capital – a move the bank has called extreme and damaging.
DEDUCTING SOFTWARE AND DEFERRED TAX ASSETS
The committee’s intervention focuses on a rule that will prohibit counting software and deferred tax assets as core capital, a change that the government estimates could increase UBS’s capital requirements by about $9 billion.
That rule is one the government can mandate directly without the say of parliament, via so-called ordinance measures, currently set to come into force in 2027.
It is unclear whether the government will heed the call.
UBS opposes the exclusion, arguing it would destroy capital without justification, thereby weakening the bank and the Swiss financial industry.
Several Swiss cantons and business associations have raised concerns about Switzerland’s competitiveness in a public consultation that ended in September.
Reuters reported in September that Switzerland and UBS are, in private, signalling a willingness to compromise on capital rules, potentially paving the way for lower requirements acceptable to the government and the bank.
(Reporting by Ariane LuthiEditing by Tommy Reggiori Wilkes and David Goodman)
