Daniel Zuberbühler, the former Director of the Swiss Federal Banking Commission (SFBC), has called for higher capital requirements for UBS in order to mitigate the risk of a potential winding up of the major bank.
Zuberbühler argues that the proposed adjustments to capital requirements fall short of what is necessary and do not adequately address the systemic risks posed by large financial institutions. He suggests a leverage ratio of 10% instead of the 5.5% that UBS is set to maintain by the end of 2026.
Zuberbühler believes that a higher equity ratio would serve as a buffer against potential financial crises and reduce the likelihood of needing to wind up the bank. He also expresses skepticism regarding the effectiveness of the existing bail-in bonds in safeguarding against a potential collapse.
Zuberbühler's perspective is informed by his extensive experience in banking regulation, particularly during the 2008 financial crisis. The evolution of banking regulations in Switzerland has been shaped by both domestic and international pressures, and Zuberbühler's call for higher capital requirements reflects a broader trend among regulators to enhance the resilience of major banks.
The implications of Zuberbühler's recommendations extend beyond UBS and could potentially affect the entire Swiss banking sector. The discussion surrounding capital requirements is likely to resonate with global financial institutions as they navigate their own regulatory landscapes.