ZURICH (Reuters) – The Swiss government’s proposed tightening of capital requirements for the banking sector will impact UBS’s ability to grow, the country’s finance minister said in an interview published on Saturday.
Switzerland’s largest bank will have to increase capital if a regulatory package announced on Wednesday to prevent a repeat of the Credit Suisse collapse goes through, Karin Keller-Sutter told the Aargauer Zeitung.
“In short, growth will become more expensive,” she said.
The proposed changes target the country’s four largest banks and contain 22 measures and more than 200 pages of recommendations on how to regulate those banks considered “too big to fail” (TBTF).
The government intends to quickly implement these measures and present two packages for implementation in the first half of 2025.
Among the measures, Keller-Sutter highlighted a proposal to change how the Swiss parent companies of UBS and the country’s other systemically important banks must back their foreign assets in the future to 100% stake, up from 60% currently.
“If we adjust this regulation now, it will have implications for the growth and size of UBS,” she said.
The requirement would also make it easier to interact with authorities abroad in the event of a crisis, she added.
Analysts estimate UBS may have to retain between $10 billion and $15 billion in excess capital compared to what it currently has.
In the interview, Keller-Sutter again criticized UBS CEO Sergio Ermotti’s salary package, which last year amounted to 14.4 million Swiss francs ($15.75 million).
“UBS is hurting itself this way,” she said.
($1 = 0.9140 Swiss franc)