A Swiss parliamentary committee has proposed a compromise on capital rules for UBS's foreign subsidiaries, suggesting the bank cover 50% of the capital backing with Common Equity Tier 1 rather than the 100% sought by the government. The remaining 50% could be met using Additional Tier 1 instruments, according to the economic affairs and taxation committee reviewing banking rules after Credit Suisse's failure. Committee president Erich Ettlin said the plan is not a victory for UBS but a solution serving Switzerland, allowing the bank to maintain its current CET1 level while carrying more AT1 capital. The committee also proposed a trigger at an 11% CET1 ratio, below which UBS would halt distributions and buybacks and cut variable pay unless capital is restored. Swiss authorities want UBS to hold roughly $20bn more in CET1 capital following its 2023 rescue of Credit Suisse, a level UBS argues is too high. The committee approved the draft by ten votes to two, and the package now moves to the upper house, with a final ruling possible by end of this year or more likely 2027.
UBS Group AGSwiss parliamentary committee proposes a compromise requiring UBS to back only 50% of foreign-unit capital with CET1, easing the stricter 100% government demand.
