Swiss lower house agrees to discuss UBS capital rules
The upper house plan would add $16 billion in capital for UBS, and the bank says its total extra capital since the Credit Suisse takeover is about $33 billion.
Published
The vote does not change any rule. It only puts the matter on the agenda.
The upper house plan would add $16 billion in capital for UBS. UBS says the total extra capital it has been asked to hold since its takeover of Credit Suisse comes to about $33 billion. The lower house's next vote on substance will set the final capital figure.
The Wall Street Journal reported on October 15, citing people familiar with the matter, that UBS is preparing contingency plans. Those plans could include moving its headquarters out of Switzerland if lawmakers tighten capital requirements. The options reported were acquiring a US financial institution and relocating, merging with a European rival, or selling UBS to a US bank, according to The Edge Malaysia, which relayed the report. Chairman Colm Kelleher warned in September that UBS would need to consider its future in Switzerland if the new banking rules became too stringent. In the week before October 15, Chief Executive Sergio Ermotti told CNBC that staying in Switzerland is good for the economy and for shareholders.
On October 25, the Swiss Bank Employees Association warned lawmakers that a headquarters move could put up to 12,000 of UBS's roughly 34,000 Swiss jobs at risk, according to Capmad, which reported the association's letter.
A headquarters move was until now an implied threat. It is now a policy option that lawmakers have to weigh. The lower house has only agreed to discuss the matter, so nothing is settled. Still, the vote ahead now has a credible alternative on the table for both sides to react to, which raises the stakes.
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