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The Swiss government is set to unveil proposals in early June regarding the capital requirements for systemically important banks like UBS, according to a finance ministry spokesman. This announcement shifts the timeline from the previously anticipated release in May.
UBS plans to downsize its investment bank to mitigate the impact of increased regulations following its acquisition of Credit Suisse. The bank aims to limit its investment banking activities to about 30% of total operations and bolster its capital base, while expressing concerns that excessive regulations could harm its competitiveness and lead to a potential relocation of its headquarters. UBS estimates it will need $19 billion in additional capital due to new rules, but is prepared to contribute only $5 billion, which falls short of regulatory demands.
UBS plans to downsize its investment bank to mitigate regulatory pressures following its acquisition of Credit Suisse. The bank aims to limit its investment banking activities to about 30% of total operations and is considering raising $5 billion in capital, though this is less than regulatory demands. UBS is also exploring potential relocation options while affirming its commitment to remain in Switzerland.
UBS is negotiating with regulators to limit its investment bank's size and increase capital reserves to avoid stricter regulations following the Credit Suisse collapse. The bank may cap its investment banking division at 30% of total business and is considering adding $5 billion in capital, though it faces demands for much more. UBS executives warn that excessive capital requirements could harm its competitiveness and potentially lead to a relocation of its headquarters, despite reassurances from lawmakers that extreme regulations will not be imposed.
The Swiss government is expected to unveil proposals regarding capital requirements for systemically important banks like UBS in early June, shifting from the previously anticipated May timeline, according to a finance ministry spokesperson.
Swiss National Bank Vice Chairman Antoine Martin stated that UBS should fully capitalise its foreign units to ensure financial stability, amid ongoing discussions about new capital requirements following the Credit Suisse collapse. UBS argues it already has sufficient capital, and stricter rules could hinder its operations and Switzerland's status as a financial hub. The Swiss government is expected to propose new regulations in May, potentially requiring UBS to set aside more capital for its foreign subsidiaries.
Swiss National Bank Vice Chairman Antoine Martin stated that financial stability would be best achieved if UBS fully capitalised its foreign subsidiaries. He emphasized that while Switzerland remains an attractive banking environment, the decision ultimately lies with the bank itself.
UBS CEO Sergio Ermotti emphasized the need for improved early warning systems to enhance banking safety, following the collapse of Credit Suisse. He advocated for prudent regulatory measures and supported public stress tests to identify financial institutions' vulnerabilities. Ermotti also highlighted the importance of accountability in cases of negligence, while awaiting clarity on capital requirements in May.
UBS CEO Sergio Ermotti has called for improved early warning systems to enhance bank safety, emphasizing the need for authorities to better detect potential issues. He supports the government's reform proposals but warns against excessive capital requirements that could disadvantage UBS and the Swiss financial sector. Ermotti anticipates more clarity on capital requirements by May, while advocating for accountability measures for negligent individuals in the banking industry.
UBS CEO Sergio Ermotti has urged authorities to enhance early warning systems to better identify banking issues, following the collapse of Credit Suisse. He emphasized the need for caution in new regulations, advocating for public stress tests to assess financial institutions' vulnerabilities and supporting reforms on compensation recovery for negligent actions. Clarity on capital requirements is anticipated in May, though Ermotti noted UBS's lack of influence over the political process.
Ariane Luthi
People
The information provided herein is generated by experimental artificial intelligence and is for informational purposes only.
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