Swiss parliamentarians are negotiating a deal to significantly reduce the capital requirements imposed on UBS, the country’s largest bank. The initial requirement, estimated at 20 billion dollars in additional Common Equity Tier 1 capital, stems from regulatory reforms triggered by the collapse of Credit Suisse in March 2023, which turned UBS into an even larger systemically important institution. A key parliamentary vote is scheduled for August 31, 2026, and lawmakers are considering reducing the additional requirement to approximately 15 billion dollars while allowing AT1 bonds to cover up to 50 percent of foreign subsidiary requirements. This concession would save UBS billions and preserve greater flexibility in capital deployment, particularly relevant to the bank’s ability to return cash to shareholders.
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