The Swiss National Bank is requiring UBS to hold roughly $20 billion in additional Common Equity Tier 1 capital against its foreign subsidiaries, a legacy demand from Credit Suisse’s collapse. Currently, UBS backs its foreign participations with between 45% and 60% CET1, while regulators are demanding full 100% coverage. The Federal Council formally proposed this reform on April 22, with full implementation requiring approximately $20 billion more in qualifying capital. Parliament is set to take up the matter around August 31, with a compromise under discussion that would allow UBS to satisfy up to half of the new CET1 requirement using Additional Tier 1 bonds.
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