Swiss Government Proposes Stricter UBS Regulations Post Credit Suisse Takeover
The Swiss government has proposed stricter regulations for UBS following its acquisition of Credit Suisse, requiring $26 billion more in core capital. The new rules aim to protect taxpayers and stabilize the financial sector, but UBS executives warn they could hinder Switzerland's competitiveness as a financial hub.
The Swiss government unveiled plans on Friday to introduce tougher regulations for UBS after its takeover of Credit Suisse, potentially increasing its core capital by $26 billion. This move, which UBS will have six to eight years to comply with, aims to strengthen the capitalization of its foreign units, as widely anticipated by analysts.
The decision comes after the 2023 collapse of Credit Suisse, prompting calls for enhanced regulation to safeguard taxpayers and prevent future financial instability. Finance Minister Karin Keller-Sutter, who holds Switzerland's rotating presidency, announced the proposal amidst political negotiations expected to stretch over several years.
UBS is already experiencing lagging share performance compared to European counterparts, raising concerns that the new regulations could increase its appeal as a takeover target. To mitigate the impact, UBS might recalibrate its business focus, possibly selling assets, amid efforts to boost growth in the U.S. and Asian markets.
(With inputs from agencies.)
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