An IMGlobalWealth.com News Report
UBS — Switzerland’s largest bank, one of Europe’s biggest lenders by assets and the world’s leading wealth manager — has rejected a package of proposed Swiss banking reforms aimed at strengthening financial stability in the wake of the 2023 collapse of Credit Suisse. The bank warned that the measures would impose excessive costs, constrain lending and weaken Switzerland’s competitiveness as a global financial centre.
The draft rules, put forward by the Swiss Federal Council, would require UBS to fully capitalise its foreign subsidiaries.
“Supporters of tougher rules argue that the enlarged UBS, now even more systemically important, must hold stronger buffers to protect taxpayers and the wider economy”
According to the bank, this could force it to hold an additional CHF 20–25 billion (around $24 billion) in capital. UBS argues that such a requirement goes beyond international norms and would materially raise its funding costs, ultimately being passed on to clients through higher prices and tighter lending conditions.
In its submission to the consultation, UBS said the proposals rely too heavily on the most expensive form of capital, Common Equity Tier 1, and fail to recognise alternative tools already used in other major jurisdictions.
The bank suggested Switzerland instead align more closely with regulatory approaches in the European Union and the United Kingdom, including greater use of Additional Tier 1 instruments and bail-in debt, which can absorb losses without placing the entire burden on equity capital.
UBS also maintained that stricter supervision and enforcement of existing rules before 2023 might have curbed the risk-taking that led to Credit Suisse’s downfall, reducing the need for sweeping new capital requirements after the fact.Business and industry groups have echoed these concerns.
The Swiss Bankers Association and other lobby organisations argue that overly stringent rules could constrain credit availability, weigh on economic growth and erode Switzerland’s appeal as a banking hub at a time when international competition is intensifying.
Political opinion, however, remains divided. Supporters of tougher rules argue that the enlarged UBS, now even more systemically important, must hold stronger buffers to protect taxpayers and the wider economy.
Swiss authorities have indicated they will review feedback from the consultation process before finalising the reforms, suggesting a compromise may yet emerge between resilience and competitiveness.
