Swiss National Bank Pushes for Stricter UBS Capital Mandates

SNB Vice Chairman Antoine Martin emphasized during a Basel event that the current regulatory framework failed to account for the risks inherent in the country’s enlarged banking sector. The government’s proposal demands that UBS fully back its foreign subsidiaries with Common Equity Tier 1 capital, a move that would require the bank to hold roughly $20 billion in additional core capital.

UBS executives have pushed back against these measures, warning that such a significant capital lock-up would hamper their global competitiveness. As parliamentary committees struggle to find a compromise, the SNB maintains that these 'too big to fail' regulations are essential. Martin noted that the sheer size of the combined entity relative to Swiss GDP necessitates a more robust safety net to ensure long-term financial stability, which serves as a prerequisite for the central bank’s core mission of maintaining price stability.