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Swedish Finance Minister Says UBS's Expansion To Be Slowed By New Capital Standards Set For Swiss Banks

Swedish Finance Minister Says UBS's Expansion To Be Slowed By New Capital Standards Set For Swiss Banks
The finance minister of Switzerland stated in an interview that was released on Saturday that the country's proposed stricter capital regulations for the banking sector will have an effect on UBS's capacity to expand.
According to Karin Keller-Sutter, Aargauer Zeitung, if the regulatory package presented on Wednesday to prevent a repeat of Credit Suisse's collapse is put into effect, Switzerland's biggest bank will need to keep more capital.
"In short, growth will become more expensive," she stated.
The 22 recommended measures and more than 200 pages of advice on how to police firms designated "too big to fail" (TBTF) are aimed at the four biggest banks in the nation.
In order to expedite the implementation of the reforms, the administration plans to propose two packages for consideration in the first half of 2025.
The suggestion to modify the requirement that the Swiss parent companies of UBS and the nation's other major banks back their foreign interests with up to 100% equity, instead of the current 60%, was the one that Keller-Sutter highlighted among the reforms.
"If we adjust this regulation now, it will have consequences for the growth and size of UBS," she stated.
In the case of a crisis, the provision would also facilitate communication with foreign authorities, she continued.
Analysts predict that UBS may need to hold on to $10 billion to $15 billion in additional capital over what it now has.
During the interview, Keller-Sutter lambasted Sergio Ermotti, the CEO of UBS, for his compensation package once more. It was worth 15.75 million Swiss francs ($14.4 million) last year.
Researchers who are installing solar-powered sensors in coffee plants are hoping for that outcome.
"UBS is harming itself in this way," she said.

Christopher J. Mitchell

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