SNB Backs 90% CET1 Capital for UBS Foreign Units, Seeks Full Coverage

The Swiss National Bank has endorsed a 90% Common Equity Tier 1 (CET1) backing for UBS's foreign units, calling it a 'good amount'.

SNB Vice Chairman Antoine Martin made the statement on Thursday, following a day after Switzerland's upper house of parliament voted on new banking regulations.

Martin emphasized that more CET1 capital backing for foreign participations improves financial stability from a perspective of SNB. He also reiterated the central bank's previous position that increased CET1 backing is beneficial.

However, Martin noted that full backing with 100% CET1 capital would have been even better, but UBS had previously warned that such a measure could impose significant costs, approximately $16 billion in additional capital. The warning was made by the bank in response to concerns about competitiveness and regulatory gaps exposed by the Credit Suisse crisis.