Switzerland's Council of States saw a majority of Free Democratic Party (FDP) senators vote to reject the federal government's draft on UBS's capital requirements, opting to refer the measure back to the Federal Council. The FDP motion was supported by members of the centrist Mitte group, according to Swiss radio SRF.
FDP Councilor Andrea Caroni told SRF that he had filed a request for the Federal Council to define the equity rules, noting that such regulations have traditionally been set by council of state ordinances and that Parliament may not be the appropriate venue. Mitte Councilor Pirmin Bischof submitted an identical request, signalling a coordinated effort to push the proposal out of the parliamentary process.
The Federal Council's draft mandates that UBS fully fund its foreign subsidiaries with equity capital. In contrast, the Council of States' Economic Commission (WAK‑S) presented a compromise at the end of August, proposing a 50‑percent split between core Tier 1 (CET1) capital and additional Tier 1 (AT1) instruments for the overseas units. The compromise remains contentious among lawmakers.
The Council of States is scheduled to debate the Federal Council's proposal on Thursday, after which a decision on whether to send it back for further work will be taken.
