Swiss Parliament Postpones Decision on Stricter UBS Capital Rules
Parliamentary Debate and Proposed Banking Reforms
Background: Credit Suisse Collapse and UBS Acquisition
ZURICH, Sept 17 (Reuters) - Switzerland's upper house of parliament on Thursday postponed until next week a vote on new banking rules being drawn up for UBS following the 2023 collapse of Credit Suisse.
Switzerland's governing Federal Council is pushing to tighten Swiss banking legislation in response to the demise of Credit Suisse, which UBS subsequently acquired.
Details of the Parliamentary Session
Postponement of the Vote
The upper house had been expected to vote on Thursday on the new rules, but the debate went on for so long that the chamber's president Stefan Engler said the session would be interrupted and brought to a conclusion next Wednesday.
Government's Rationale for Stricter Rules
The government argues stricter rules are necessary to protect taxpayers against the risk of another banking meltdown.
Proposed Capital Requirements for UBS
Overview of the Capital Demands
Its full suite of proposals for the banking overhaul would require UBS to hold an extra $20 billion in Common Equity Tier 1 capital. UBS describes the government's plan as excessive and says it would undermine its international competitiveness.
Compromise on Capital Structure
Foreign Unit Backing and Additional Tier 1 Capital
The higher capital demands hinge chiefly on making UBS back its foreign units 100% with CET1, though last month, an upper house committee passed a compromise that could let the bank use $13 billion in so-called Additional Tier 1 capital instead.
(Writing by Dave Graham, editing by John Revill)
