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Switzerland wants UBS to be safer after Credit Suisse blew up. UBS says too much safety could make it less competitive. Now lawmakers are trying to mix a regulatory **** tail that protects taxpayers without turning the country's last megabank into a padded cell with a banking license.
Swiss lawmakers are expected to send a softened banking reform proposal to the upper house of parliament, as the country tries to settle one of the biggest questions left by the Credit Suisse collapse: how much capital should UBS be forced to hold?
The Swiss government originally wanted UBS to hold about $20 billion in additional Common Equity Tier 1 capital. CET1 is the hard stuff: high-quality equity capital that absorbs losses first and gives regulators comfort when a bank gets into trouble.
The proposed requirement followed UBS's emergency takeover of Credit Suisse in 2023. That deal stopped one crisis, but created another problem. Switzerland now has one giant globally important bank, and regulators want to make sure taxpayers are not dragged back into another rescue.
#make
Switzerland wants UBS to be safer after Credit Suisse blew up. UBS says too much safety could make it less competitive. Now lawmakers are trying to mix a regulatory **** tail that protects taxpayers without turning the country's last megabank into a padded cell with a banking license.
Swiss lawmakers are expected to send a softened banking reform proposal to the upper house of parliament, as the country tries to settle one of the biggest questions left by the Credit Suisse collapse: how much capital should UBS be forced to hold?
The Swiss government originally wanted UBS to hold about $20 billion in additional Common Equity Tier 1 capital. CET1 is the hard stuff: high-quality equity capital that absorbs losses first and gives regulators comfort when a bank gets into trouble.
The proposed requirement followed UBS's emergency takeover of Credit Suisse in 2023. That deal stopped one crisis, but created another problem. Switzerland now has one giant globally important bank, and regulators want to make sure taxpayers are not dragged back into another rescue.
#make
13 days ago
