Swiss Minister and UBS Chief Clash Over Capital Rules Before Key Vote

Swiss Finance Minister Karin Keller-Sutter and UBS Chief Executive Sergio Ermotti on Tuesday presented opposing arguments on proposed new capital regulations, speaking at the same event in Zurich one day before a decisive parliamentary vote.

Keller-Sutter, who managed the state-brokered takeover of Credit Suisse following its 2023 collapse, argued that requiring foreign subsidiaries to be backed by 100% Common Equity Tier 1 capital is the most effective way to shield taxpayers. She said the plan, which has received support from the Swiss National Bank, would place the burden of losses on shareholders rather than the public.

The minister also noted that an alternative proposal before parliament's upper chamber, which calls for 90% CET1 backing of foreign units, is close to the government's own position.

Ermotti rejected both options as unacceptable. He told the audience that the discussion should recognise that UBS represents not only a risk to Switzerland but also a benefit to its economy.

"We are very concerned that this would make us uncompetitive and ultimately call into question the sustainability of the business model," he said.

Ermotti added that the choices made in the coming weeks and months would shape the future of the financial centre for the next 10 to 20 years.

After the upper house vote, the capital rules bill will proceed to the lower house of parliament. A final decision is expected at the end of this year at the earliest, and more likely in 2027.