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The Swiss National Bank has called for reforms in the banking sector's capital regime following the 2023 collapse of Credit Suisse, which was subsequently acquired by UBS. The government aims to bolster UBS's capital to prevent similar failures, though UBS contends that increased capital requirements could hinder its competitiveness. The SNB noted that UBS's current capital position is stronger than Credit Suisse's pre-crisis status, while also highlighting ongoing risks in the mortgage and real estate markets.
The Swiss National Bank (SNB) has called for improvements in the capital regime of the banking sector following the 2023 collapse of Credit Suisse, which was taken over by UBS. The government is considering stricter regulations, particularly regarding UBS's capital requirements for its foreign subsidiaries, despite UBS arguing that it is already well-capitalized compared to global peers. The SNB noted positive market indicators for the integration of Credit Suisse into UBS, while also highlighting ongoing risks in the mortgage and real estate markets.
The Swiss National Bank (SNB) has identified substantial loss potential at UBS, despite improved adjusted earnings following its acquisition of Credit Suisse. While UBS meets future capital requirements under too-big-to-fail regulations, integration costs and legacy risk positions currently weaken its loss-bearing capacity. The SNB supports government proposals for enhanced banking regulation to address existing capital regime weaknesses.
Karin Keller-Sutter must ensure UBS adheres to stricter regulations following the PUK report, which highlights Credit Suisse's inadequate liquidity and equity as key factors in its collapse. The report calls for increased capital requirements for systemically important banks and stronger powers for FINMA to enforce compliance and accountability among financial institutions.
The SNB's annual report highlights that UBS's current capital position is stronger than that of Credit Suisse prior to the crisis. This assertion underscores the resilience of UBS in the face of financial challenges, reflecting a more stable banking environment.
Today, the National Council will review the 2024 Annual Report and discuss the fallout from Credit Suisse's collapse, including proposals to enhance FINMA's oversight and modify bonus policies. The assembly will also consider a controversial initiative for a 50% tax on large inheritances to fund climate measures, which faces opposition from the government.Meanwhile, the Council of States will address various legislative issues, including the suspension of funds for UNRWA and reforms to the Asylum Law, alongside discussions on cost-containment measures and cultural funding for 2025-2028.
The Swiss National Council is set to debate the lessons from Credit Suisse's collapse, focusing on remuneration policies for systemically important banks, particularly UBS. The discussion follows UBS CEO Sergio Ermotti's CHF 14.9 million salary announcement for 2024, amid scrutiny of past bonuses at Credit Suisse. Key issues include adapting "too big to fail" regulations and enhancing financial oversight to prevent future crises.
UBS has delayed its net zero emissions target from 2025 to 2035, attributing the setback to its acquisition of Credit Suisse, which expanded its corporate real estate portfolio. This decision follows a trend among banks reassessing climate commitments, with UBS remaining a member of the Net-Zero Banking Alliance while considering changes to its climate goals. The bank's latest sustainability report indicates a shift in focus, removing direct links between executive compensation and climate objectives.
Federal Councillor Karin Keller-Sutter addressed concerns over UBS's lobbying against stricter capital requirements, emphasizing the need to protect taxpayers and ensure a stable financial system. While acknowledging ongoing communication with UBS, she rejected a proposed salary cap for bank executives, advocating instead for accountability measures. The Federal Council aims to prevent future crises like the Credit Suisse collapse by ensuring that systemically important banks can be resolved effectively.
In Switzerland, cantonal banks benefit significantly from state guarantees, providing them with a competitive edge worth approximately 585 million francs annually. While these banks dominate the mortgage market, their tax exemptions and lower capital costs raise concerns about competition distortion and financial equalization among cantons. The debate intensifies as the EU questions the legitimacy of such state interventions.
Credit Suisse Strategic Income I
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