What The Too-Big-To-Fail Swiss Parliament Vote Means For UBS
UBS must be significantly better capitalised than it is at present. UBS is to underpin its foreign subsidiaries with 90% hard capital. This decision came about after months of wrangling. Twenty nine Senators voted in favour of this proposal, with 16 against.
What does this mean?For UBS, this represents a doubling of its capital buffer. A 45% core capital ratio currently applies to its foreign subsidiaries. It has various options for raising the additional capital. For example, it could issue additional shares, retain profits or downsize its subsidiaries.
Who wins with this outcome?Finance minister Karin Keller-Sutter is likely to be largely satisfied even though the government's stricter proposal did not get through. But neither did the significantly weaker alternative proposal recommended by the Economic Affairs Committee of the Senate.
More More How to tame UBS without making the bank toothlessThis content was published on Apr 11, 2024 Swiss government proposals to regulate Too Big to Fail banks meets sceptical response.
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