Swiss Finance Minister Karin Keller-Sutter has emphasized that UBS's capital requirements will depend on the bank's ability to resolve potential crises.

The Swiss government's response to the vulnerabilities exposed by the collapse of Credit Suisse

The Swiss government is considering new stability measures in response to the vulnerabilities exposed by the collapse of Credit Suisse. UBS, which acquired Credit Suisse, is under pressure to ensure its stability to prevent any negative impact on the Swiss economy. The government is deliberating on "too big to fail" proposals to enhance the resilience of major financial institutions.

Keller-Sutter noted that the capital requirements for UBS will be influenced by its resolvability and the government's cautious approach. The subsidiaries of Credit Suisse in the United States and Britain were not adequately capitalized, raising questions about the future capitalization of these foreign units. The capital requirements for UBS will include progressive components that increase with the bank's size.

Concerns about increased capital requirements and balancing competitiveness and stability

UBS has expressed concerns about increased capital requirements affecting its business operations. Keller-Sutter acknowledged the need to balance competitiveness and stability in the financial sector. She also mentioned the issue of executive remuneration at UBS and the potential for clawing back remuneration. The possibility of empowering the financial markets regulator, FINMA, to impose fines on banks is being considered.

Monitoring UBS's ability to adapt to new capital requirements

UBS's ability to adapt to new capital requirements will be closely monitored by investors and regulators. The entire Swiss banking sector may face increased scrutiny and regulatory demands as the government seeks to enhance financial stability.