Swiss party plans curb on UBS investment bank as trade-off on capital rules

By Ariane Luthi

ZURICH (Reuters) -One of Switzerland's main governmental parties could soon suggest capping UBS's concern banking activities arsenic portion of a regulatory overhaul aimed astatine making the assemblage little risky, a elder lawmaker said connected Wednesday.

The right-wing Swiss People's Party (SVP), the biggest radical successful parliament, would transportation the program arsenic soon arsenic imaginable if the authorities projected that UBS afloat capitalize its overseas units, SVP lawmaker Thomas Matter said.

Limiting the concern slope could beryllium a mode of reducing the magnitude of other superior UBS would request to hold, helium said.

"I volition suggest that concern banking whitethorn relationship for a maximum of 30% of the full concern of a systemically important slope and that the concern areas are taken into relationship successful the hazard weighting," Matter told Reuters.

Reuters reported this week that UBS has floated the thought of capping the size of its concern slope arsenic 1 concession it is considering to effort to trim the magnitude of superior it mightiness person to stump up nether authorities proposals present expected successful aboriginal June.

Responding to that report, a UBS spokesperson said connected Tuesday it supported successful rule the government's efforts to fortify fiscal stableness provided they did not enactment disproportionate burdens connected the institution. Reached connected Wednesday for a effect to Matter's remarks, the spokesperson said the bank's presumption was unchanged.

UBS has been facing tougher regularisation since it acquired Credit Suisse aft its aged rival collapsed successful 2023, leaving Switzerland with conscionable 1 large planetary bank.

The enlarged slope has a equilibrium expanse bigger than the Swiss system and authorities privation to debar different meltdown by imposing stricter rules. These absorption connected the magnitude of superior UBS indispensable clasp to incorporate the imaginable hazard to taxpayers.

Financial marketplace regulator FINMA and the Swiss National Bank person backed making UBS afloat capitalize its overseas units.

UBS CEO Sergio Ermotti has pushed backmost against saddling the slope with a heavier superior burden. He argues the lender is already good capitalized and that excessive regularisation would enactment some UBS and Switzerland astatine a disadvantage.

Matter said that portion UBS is "much safer than it was earlier the fiscal crisis", the caller authorities would request to beryllium effectual good beyond Ermotti's tenure astatine the slope to ward against imaginable mismanagement successful the future.

Excluding non-core and bequest assets, the concern slope accounted for astir 21% of UBS's risk-weighted assets astatine end-2024, which would inactive let immoderate country for growth.