Swiss National Bank welcomes lawmaker support for UBS capital plan

Switzerland’s central bank has thrown its weight behind a parliamentary vote that would force UBS to hold billions more in capital reserves, marking the most significant regulatory tightening to hit the country’s banking sector since Credit Suisse imploded in 2023. The Swiss National Bank expressed support for the Council of States’ decision to mandate a 90% Common Equity Tier 1 capital backing requirement for UBS Group AG’s foreign subsidiaries. The upper house voted 29 to 16 in favor on September 23, sending a clear signal that Swiss lawmakers are serious about preventing another too-big-to-fail catastrophe. The 90% compromise The original government proposal called for a full 100% CET1 backing, which would have required UBS to raise roughly $20B in additional capital. The 90% figure is a negotiated step down, expected to cost UBS somewhere between $16B and $18B instead. SNB Vice Chairman Antoine Martin acknowledged the compromise openly. He called 90% “a good amount of CET1 capital” while noting that 100% would have been preferable from a pure financial stability standpoint. Credit Suisse’s ghost still haunts Bern Every element of this legislation traces back to one event: the f...