ZURICH, Sept 21 (Reuters) – Swiss business groups have weighed into the debate on tougher capital rules for UBS, writing to lawmakers to lobby against what they say risks being “excessive” regulation drawn up for the bank after the 2023 collapse of Credit Suisse.
The heads of top business lobby economiesuisse, and bodies for SMEs, manufacturers, multinationals and pharma companies, said the government’s proposals would massively disadvantage UBS against international rivals by ramping up capital costs.
“Such excessive regulatory requirements would not only affect the banks themselves,” the signatories wrote to upper house lawmakers in a letter dated September 18 seen by Reuters.
“In the long term, they would also be reflected in higher financing costs and a reduced supply of credit and capital market services for industry for our SMEs,” they added.
The government, which says stricter regulations are needed to strengthen banks and protect taxpayers from the risk of another banking meltdown, calculates its entire package of measures would mean UBS holding another $20 billion in capital.
Lawmakers are deciding between the government’s demand that UBS back its foreign units with 100% Common Equity Tier 1 capital, a proposal for 90% CET1 backing and a softer compromise for backing of 50% CET1 and 50% cheaper Additional Tier 1 bonds.
Both UBS CEO Sergio Ermotti and Chairman Colm Kelleher have in the past few days urged lawmakers to avoid imposing excessively harsh rules on the bank, saying that while the 50% AT1 option would be painful, it would be manageable.
UBS calculates the AT1 option would mean finding another $13 billion in capital.
The letter is the latest lobbying push and comes as the upper house prepares to vote on reform proposals on Wednesday.
The associations urged lawmakers to back the 50% AT1 capital compromise, saying the other two were too stringent.
“This strengthens systemic stability without weakening the financial centre or unnecessarily worsening financing conditions for companies,” the letter said.
(Reporting by John Revill; Editing by Alexander Smith)
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