Swiss Committee Postpones Decision on UBS Capital Requirements

A decision on the capital requirements for UBS, Switzerland's globally systemic bank, has been delayed. The Senate's Commission for Economy and Taxation (CER-E) announced it has not yet made a determination regarding the equity levels for such institutions. Consequently, a press conference scheduled for Tuesday afternoon was canceled.

Further updates on the matter are expected via a press release later in the day. The commission's deliberations are set to resume on August 31. This postponement comes as the Swiss government, through the Federal Council, is pushing for revised banking laws. A key proposal is to require systemically important banks to fully cover their stakes in foreign subsidiaries with equity, a significant increase from the current approximately 60% requirement.

This proposed change, directly influenced by the collapse of Credit Suisse, would primarily affect UBS, as other major Swiss banks operate almost exclusively within the country. The CER-E's agenda also included discussions on the Public Liquidity Backstop, a public liquidity guarantee mechanism for systemically important banks.

The Swiss parliament's ongoing review of banking regulations highlights the country's efforts to strengthen its financial sector following the near-collapse of Credit Suisse. The focus on capital requirements for foreign subsidiaries underscores a desire to ensure that even overseas operations do not pose an existential threat to the parent bank or the broader financial system.