UBS Proposes Investment Banking Cap to Ease Swiss Regulatory Demands
The bank negotiates concessions, including a 30% cap on investment banking and $5 billion in additional capital, to mitigate potential $40 billion capital requirements.
- UBS is negotiating with Swiss regulators to avoid stricter capital requirements following its acquisition of Credit Suisse in 2023.
- The bank has proposed capping its investment banking activities at 30% of its total business as a potential regulatory trade-off.
- Swiss regulators are considering requiring UBS to fully capitalize its foreign units, which could significantly increase its capital requirements by up to $40 billion.
- UBS has committed to adding $5 billion in additional capital but argues that excessive regulation could harm its competitiveness and potentially lead to relocation.
- Swiss lawmakers remain divided on balancing financial stability with UBS's competitiveness, with final regulatory decisions expected to take years.
