Swiss Senate Postpones Vote on UBS Capital Requirements

The Senate of Switzerland postponed a vote on new capital requirement rules for systemically important banks after failing to conclude deliberations on Thursday. The proposed regulations target banks with foreign holdings, specifically aiming to ensure that foreign subsidiaries are underpinned by 100% hard core capital (CET1).

UBS opposes the federal government's proposal, stating the measure would require the bank to secure approximately $22 billion in additional core capital. While left-wing parties support the 100% requirement, a separate minority has suggested a 90% threshold.

In an attempt to find middle ground, the Economic Affairs Committee of the Swiss Senate proposed a compromise to increase the hard core capital requirement for overseas holdings from 45% to 50%, allowing Additional Tier 1 (AT1) bonds to cover the remaining balance. UBS has also rejected this alternative. Debate on the bill is scheduled to resume next week.