The Swiss government has proposed stricter capital rules for UBS following its takeover of Credit Suisse, which could require the bank to hold an additional $26 billion in core capital. This includes increasing capital held against foreign units from 60% to 100%, potentially adding $23 billion.
UBS stated it 'strongly disagrees' with these higher reserve requirements, arguing they would disadvantage the Zurich-based bank against rivals and undermine Switzerland's financial competitiveness. The proposals confirm some of UBS's worst fears about incoming regulations.
The new rules could also impact UBS's ability to conduct future share buybacks, although dividend payments and organic growth are expected to remain possible under appropriate transition periods. This represents a significant regulatory challenge for the bank.
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