Swiss Senate Backs Tougher Capital Rules for UBS Post-Credit Suisse
The Council of States approved the measure 29-16, mandating that UBS back its foreign subsidiaries with Common Equity Tier 1 (CET1) capital equal to 90% of their value.
According to Bloomberg, UBS has estimated the rule would force it to set aside roughly $16 billion in additional CET1 capital at its Swiss parent entity.
While the 90% threshold marks a modest retreat from the government's original 100% backing proposal, it still represents a considerably stricter standard than what's currently in place.
Finance Minister Karin Keller-Sutter has argued the plan would keep UBS resilient in the event of a future crisis and shield Switzerland from the risk of its dominant bank sliding toward collapse.
UBS, which had pushed for an alternative approach allowing heavier reliance on Additional Tier 1 (AT1) bonds, pushed back against the outcome.
"This political outcome is not a compromise and fails to address the root causes of the Credit Suisse collapse," said the bank, adding that it would focus on protecting its "long-term interests."
The reform push stems directly from the 2023 meltdown of Credit Suisse, which UBS absorbed through an emergency, government-brokered takeover.
The bill now heads to the lower house of parliament, with a final decision not expected before 2027.
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