Swiss parliamentary committee delays decision on UBS capital rules

The Swiss Council of States' Economic and Taxation Affairs Committee (WAK-S) has not yet reached a decision regarding proposed stricter capital requirements for systemically important large banks. While the committee agrees on the need for stronger capital backing for foreign holdings, the specific extent of these requirements remains highly contested.

The Swiss Federal Council has proposed that foreign holdings be fully backed by hard equity. Currently, requirements stand at approximately 60 percent, with only 45 percent required to be hard equity, allowing the remaining 15 percent to be covered by Additional Tier 1 (AT1) instruments. UBS, the primary bank affected by these changes, is actively opposing the proposal.

The committee aims to balance public safety needs with the competitiveness of the Swiss financial center. Discussions will continue on August 31 following a report from the administration and the Federal Office of Justice. The Council of States is expected to vote on the tightening of 'too big to fail' regulations this autumn.