Zurich – Leading Swiss business groups, including the economiesuisse federation and several sector‑specific associations, have sent a letter to members of the upper house of parliament urging a balanced approach to new capital requirements for UBS. The letter, dated September 18, argues that the government’s proposed rules could place the bank at a competitive disadvantage and increase financing costs for small and medium‑sized enterprises.

Letter highlights concerns over “excessive” regulation

The signatories contend that demanding UBS back its foreign subsidiaries with 100% Common Equity Tier 1 (CET1) capital, or even a 90% CET1 requirement, would be overly harsh. They advocate for the compromise option that would require 50% CET1 and 50% Additional Tier 1 (AT1) bonds, describing it as a measure that “strengthens systemic stability without weakening the financial centre or unnecessarily worsening financing conditions for companies.”

Government’s rationale and cost estimates

The Swiss government says stricter capital rules are needed to protect taxpayers and reinforce the banking system after the 2023 Credit Suisse collapse. Officials estimate the full package would require UBS to hold an additional $20 billion in capital. Under the 50% AT1 option, UBS would need to raise roughly $13 billion.

UBS leadership backs a moderate approach

UBS chief executive Sergio Ermotti and chairman Colm Kelleher have publicly urged lawmakers to avoid the most stringent proposals. While acknowledging that the 50% AT1 option would be painful, they argue it is manageable and preferable to the harsher alternatives.

Parliament set to vote

The Swiss upper house is scheduled to vote on the reform proposals on Wednesday. The business groups’ letter is the latest lobbying effort aimed at influencing that decision.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.