Swiss committee backs tougher capital rules for UBS

Switzerland’s Council of States Economic Affairs and Taxation Committee has backed stricter capital requirements for systemically important banks, SRF reported. Banks would have to fully back their investments in foreign subsidiaries with common equity tier 1 capital.

The committee, known as WAK-S, discussed the revision of the Banking Act for the second time as part of the “too big to fail” regulations. The proposals from the Federal Council on capital requirements prompted debate.

The new rules would currently affect only UBS in practice. The bank has strongly opposed the stricter requirements.

Following WAK-S’s decision, the Banking Act revision could be considered by the Council of States during its autumn session. It would then go to the corresponding committee of the National Council and subsequently to the chamber itself, which could take up the bill at the earliest during its winter session.

A referendum would remain possible after Parliament reaches a decision. If one were held, voters would have the final say on the capital requirements for UBS.