Swiss Business Groups Pressure Parliament over UBS Capital Rules Before Vote
Ermotti says a full capital backing would hurt UBS returns as lawmakers weigh a compromise that could require $13 billion more in Tier 1 capital.
- Chief Executive Officer Sergio Ermotti warned lawmakers on Sunday against imposing excessively strict capital requirements on UBS, ahead of a decisive parliamentary vote scheduled for Wednesday.
- Following the 2023 Credit Suisse collapse, the Swiss government argues stricter capital rules are necessary to protect taxpayers and has proposed requiring UBS to back foreign units with 100% Common Equity Tier 1 capital.
- The AT1 compromise would require UBS to amass $13 billion in additional capital, which Ermotti described as "bearable," while the government's full-backing proposal demands an extra $20 billion.
- Ermotti reiterated that the Swiss National Bank and FINMA deserve blame for the Credit Suisse demise, stating that demanding 90% or 100% capital backing would leave the bank with "two black eyes and a broken nose."
- UBS Chairman Colm Kelleher warned the bank must carefully consider its future in Switzerland if new rules prevent it from competing, even as UBS expects to reach pre-takeover return on equity levels by year-end.
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The UBS published a new document this Monday to clarify its position on the proposals for reform of banking regulation in Switzerland, advocating a targeted and proportionate approach and alerting to the effects of more demanding capital requirements on the bank's competitiveness.
Swiss business groups pressure parliament over UBS capital rules before vote
ZURICH, Sept 21 (Reuters) – Swiss business groups have weighed into the debate on tougher capital rules for UBS, writing to lawmakers to lobby against what they say risks being “excessive” regulation drawn up for the bank after the 2023 collapse of Credit Suisse. The heads of top business lobby economiesuisse, and bodies for SMEs, manufacturers, multinationals and pharma companies, said the government’s proposals would massively disadvantage U…
Business Times
Live MintUBS CEO Ermotti warns against harsh capital rules ahead of vote
UBS chief executive Sergio Ermotti warned lawmakers against imposing excessively strict capital requirements on the Swiss bank in an interview published on Sunday (Sep 20), days before a key ... Read more at The Business Times.
UBS Head Ermotti Calls AT1 Capital Compromise Bearable, NZZ Says
(Bloomberg) -- UBS Group AG Chief Executive Officer Sergio Ermotti said a proposal by Swiss lawmakers for the bank’s future capital requirements is “bearable” but would still deal a blow to the lender, according to a newspaper interview.
On Wednesday, the Council of States will vote on how much capital UBS will have to hold in the future. For Grossbank, the capital issue marks a turning point. CEO Sergio Ermotti is all the more alarmed by the arguments with which the debate is being conducted. In a conversation with the NZZ, he tries to create clarity.
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