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3 clusters · 4 sources · 22 days · First seen · Last updated

UBS faces capital cost increases and US Senate scrutiny

Overview

Swiss regulators and parliamentary committees continue to debate stricter capital requirements for systemically important banks, specifically targeting UBS. Following the 2023 Credit Suisse crisis, the Swiss National Bank (SNB) has proposed that UBS must fully back its foreign subsidiaries with high-quality Common Equity Tier 1 (CET1) capital held within Switzerland.

Recent developments indicate a shift in the specific structure of these requirements. The Swiss Council of States' Economic and Taxation Affairs Committee (WAK-S) has suggested that UBS foreign subsidiaries be backed by 50 percent CET1 capital and 50 percent AT1 bonds. UBS opposes this, estimating that this specific mandate would require an additional $13 billion in AT1 capital. When combined with other requirements stemming from the Credit Suisse takeover, the bank estimates it may need to build up approximately $30 billion in additional Tier 1 capital.

Parallel to these domestic regulatory pressures, UBS is facing scrutiny from the US Senate Judiciary Committee. Chairman Charles Grassley has issued a letter stating that previous responses regarding an investigation into former Credit Suisse accounts linked to Nazi-era organizations were “insufficient,” prompting 62 additional questions. While the committee’s ombudsman has accused the bank of withholding documents, UBS has denied these allegations, noting it has provided over 19 million documents and spent more than $100 million on the investigation to date.

Entities

UBS · Credit Suisse · Swiss Federal Council · Antoine Martin · FINMA

Timeline

  1. 10 days ago

    [BUSINESS] 2 sources
    UBS faces capital cost increases and US Senate scrutiny

    UBS faces $13 billion in estimated additional capital costs due to Swiss regulatory proposals and increased pressure from the US Senate regarding investigations into former Credit Suisse Nazi-era accounts.

  2. 16 days ago

    [BUSINESS] 2 sources
    UBS faces new Swiss capital requirements for foreign units

    Swiss regulators are proposing that UBS back its foreign subsidiaries with 100% high-quality capital, a move estimated to cost the bank $20 billion as authorities seek to prevent systemic contagion.

  3. about 1 month ago

    [BUSINESS] 6 sources
    Swiss parliamentary committee delays decision on UBS capital rules

    The Swiss parliamentary committee has yet to decide on stricter capital requirements for large banks, specifically regarding how foreign holdings are backed, amid ongoing debate over financial stability and UBS

Sources

cash.ch · cryptobriefing.com · finanzen.ch · thefinanser.com

This summary has been updated 1 time: see revision history