ZURICH, March 16 (Reuters) - UBS may have gained a potential advantage in a long battle over Swiss government plans to raise its capital requirements, some lawmakers said, after a parliamentary filing
UBS May Benefit as Swiss Upper House Reviews New Banking Capital Rules
Swiss Parliamentary Review of Banking Capital Requirements
Potential Advantage for UBS in Legislative Process
ZURICH, March 16 (Reuters) - UBS may have gained a potential advantage in a long battle over Swiss government plans to raise its capital requirements, some lawmakers said, after a parliamentary filing showed the proposal has been assigned to its upper house first.
If the government's bill begins there it is more likely to be softened than in the lower chamber, the lawmakers said. That could help set the tone for what is expected to be a long legislative process for the bill.
Upcoming Discussions and Timeline
Upper House Committee's Role
The Swiss upper house's Economic Affairs and Taxation Committee is set to discuss the matter on May 4, after the government publishes its proposed banking regulation bill, a move expected before the end of April.
Implementation of Ordinance-Level Rules
Other rules at the so-called ordinance level will be enacted directly by the government and are expected to come into force in 2027.
Details of the Capital Requirement Proposal
Implications for UBS and Swiss Financial Sector
The law determines how much capital UBS has to hold at home for its subsidiaries abroad. The government has proposed 100%, up from currently 60%, which the bank has said will hurt its competitiveness and with it, Switzerland's financial sector.
Legislative Compromise and Alternatives
AT1 Bonds as a Partial Solution
Three members of the upper house committee, along with a fourth lawmaker from the lower house, in December pitched a compromise on capital, which could allow UBS to partially back foreign subsidiaries with so-called AT1 bonds rather than more expensive Common Equity Tier 1 capital.
UBS at the time called the compromise "more constructive" than the government's approach.
Future Regulatory Developments
Public Consultation on "Too Big to Fail" Rules
Separate rules for banks that are deemed "too big to fail" will be sent to a public consultation later this year.
(Reporting by Ariane Luthi; Editing by Alexander Smith)
