SNB Stands Firm on UBS Capital Requirements Amid Compromise Talks

Swiss National Bank vice-president Antoine Martin emphasized that UBS should be required to fully back its foreign units with high-quality equity capital from Switzerland. This stance is in contrast to a compromise proposal being discussed by lawmakers, which would allow UBS to meet half of the government's requirement using less secure debt known as AT1 bonds.

Martin argued that higher capital requirements do not necessarily make banks less profitable. He cited examples of highly profitable US banks with high capital backing.

The SNB vice-president spoke against the backdrop of discussions on 'too big to fail' proposals for UBS, which is facing challenges from Swiss regulators. The government's original proposal, which Martin supports, would increase the resilience of the Swiss financial market.