Swiss regulator may phase in UBS capital requirements

Switzerland's financial regulator, Finma, may gradually introduce higher capital requirements for UBS Group AG. This approach could delay changes the bank has opposed, allowing them to adapt over several years. Finma’s CEO, Stefan Walter, emphasized the importance of getting the rules right, even if it takes longer. UBS is particularly concerned about a requirement for 100% capital backing for foreign units. This could mean the bank needs an extra $25 billion in capital. UBS argues that this would hurt its competitiveness and affect returns for investors. Walter highlighted that the regulations are meant to prevent problems that can arise when a bank’s capital is insufficient. He noted that no other country has a systemic bank as significant to its economy as UBS, making this situation unique. The new legislation is expected to be presented to Swiss lawmakers by May, with the earliest changes likely in 2028. The Swiss government previously identified inadequate capital for foreign units as a key factor in the Credit Suisse crisis. Analysts believe a longer implementation period could help UBS build its capital without affecting shareholder payouts significantly. Walter has faced criticism over Finma's handling of the situation leading to the Credit Suisse crisis. However, he insists that the regulator must remain independent and effective. UBS has expressed frustration at being held accountable for issues that affected its rival Credit Suisse. Despite the tougher stance in Switzerland, Walter noted that UBS is not being treated more harshly than other major banks. In contrast, countries like the US and UK are moving towards simplifying financial regulations. Walter expressed a commitment to maintaining strong regulation in Switzerland, believing it will benefit the country's economy in the long run.