The case

Today, the Swiss government proposed significant regulatory reforms for UBS following its 2023 acquisition of Credit Suisse, aiming to enhance financial stability and prevent future systemic risks.

Source: news.admin.ch & Swiss and international Press

The commentary

UBS would be required to increase its core capital by up to USD 26 billion, raising its Common Equity Tier 1 (CET1) ratio from 14.3 % to approximately 15- 17 %.

UBS would need to fully capitalize its foreign units, increasing the capital backing from the current 60 % to 100 %.

The government plans to present draft proposals in the second half of 2025, with parliamentary approval expected by late 2027. The new regulations would come into force no earlier than 2028, with a transition period of six to eight years.

Proposed reforms include enhanced asset valuation provisions, improved liquidity access from the Swiss National Bank and reduced regulatory barriers. The Swiss Financial Market Supervisory Authority (FINMA) would also be equipped with increased powers, including the ability to fine institutions and enforce recovery plans.

A new regime would be introduced to clarify executive responsibilities and empower regulators to fine banks and reclaim bonuses in cases of misconduct.

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