ZURICH, Aug 11 (Reuters) – A Swiss parliamentary committee will meet on Tuesday to discuss planned new banking regulations for UBS (UBSG.S),amid a push by some lawmakers to temper tougher rules drafted by the government after the demise of Credit Suisse.The draft bill envisages making the bank carry some $20 billion in additional Common Equity Tier-1 capital in order to avert another meltdown and protect taxpayers.But UBS, which acquired its old rival Credit Suisse after its 2023 collapse, argues the burden is excessive, would weaken its competitive position and hurt Swiss banking.The bill is being debated by the economic affairs and taxation committee of parliament’s upper house, where lawmakers who worry it is too onerous have pitched amendments to ease the capital burden on Zurich-based UBS.A compromise was emerging that was likely to give UBS more room to breathe on capital, said Hannes Germann, a committee member from the conservative Swiss People’s Party.”Without some risk, there’s no business,” he said, but added that it was too early to say if a deal would be struck on Tuesday.Much of the extra burden centres on the government’s desire for UBS to 100% capitalise its foreign units, up from 60% now, and that CET1 capital alone should cover that requirement. At present, it can be partly met by cheaper alternatives.A compromise under discussion is to let UBS use so-called Additional Tier 1 capital to cover part of the burden. Less expensive to hold than CET1, AT1 debt is designed to absorb losses during crises, but also deemed less secure by regulators.Thierry Burkart, a lawmaker of the centre-right Liberals, or FDP, who proposed enabling UBS to partly back the foreign units with AT1 capital, said he believed an agreement could be reached that balanced the bank’s concerns and risks to taxpayers.
Reporting by Dave Graham; Editing by Clarence Fernandez.
