UBS CEO Sergio Ermotti warned again about overly strict capital regulations ahead of a vote in the Swiss parliament’s small chamber, the Ständerat, expected on the coming Wednesday. In an interview published Sunday with the Neue Zürcher Zeitung, Ermotti said the bank would accept some tightening but objected to government proposals for foreign subsidiaries.
The government in Bern demands that foreign subsidiaries be backed by 100 % hard core capital (CET1). The Ständerat’s economic commission proposed a milder rule splitting the requirement evenly between hard core capital and cheaper AT1 bonds. Ermotti said the stricter version would add roughly $13 billion of additional core capital for UBS, which he described as painful but manageable. He noted that a proposal for a 90 % hard core backing had received substantial support in a Thursday debate.
Ermotti cautioned that the extra costs would not fall solely on shareholders but would also affect customers and employees, and that the bank must earn a comparable return to competitors to remain competitive for clients and capital. He linked the push for tighter rules to the collapse of Credit Suisse in March 2023 and its subsequent rescue by UBS, assigning partial blame to supervisory authorities, specifically the Financial Market Supervisory Authority (Finma) and the Swiss National Bank (SNB).
