Swiss Finance Minister Karin Keller-Sutter has emphasized the importance of UBS's capital requirements in ensuring the stability of the banking sector. New stability measures are being considered by Swiss authorities to prevent another banking crisis like the collapse of Credit Suisse last year.
Keller-Sutter highlighted that UBS's foreign subsidiaries, particularly those in the United States and Britain, have had inadequate capital adequacy. The government is currently evaluating the importance of capitalizing these units in the future. The overall capital requirements will also include progressive components that increase with the bank's size, as well as stress tests.
The discussion around UBS's capital requirements involves finding a balance between maintaining the competitiveness of the financial sector and ensuring its stability. UBS has expressed concerns about potential higher capital requirements, arguing that they could hinder its business operations. The Swiss government is working to align its regulatory framework with other jurisdictions that impose capital requirements exceeding 60%. The minister acknowledged that liquidity would be a critical concern in another financial crisis, further complicating the regulatory landscape.
Keller-Sutter believes that authorities should not directly intervene in salary settings but supports mechanisms for clawbacks on compensation to promote accountability. She suggested that a referendum to limit bankers' pay would likely receive public support, reflecting concerns about income inequality and corporate governance. The possibility of granting the Swiss financial market regulator, FINMA, the authority to impose fines on banks is being considered. This potential shift in regulatory power demonstrates the government's commitment to enhancing oversight and accountability in the banking sector.
As UBS navigates these regulatory challenges, the market and stakeholders will closely observe the implications of the government's decisions. Balancing financial stability and a competitive banking environment remains a critical challenge for Swiss authorities as they aim to strengthen the financial system against future crises.