Swiss Finance Minister Doubts UBS Will Leave Home Base After Capital Vote

Swiss Finance Minister Karin Keller-Sutter has said it is unlikely that UBS would move its headquarters out of Switzerland, following a parliamentary vote this week in favour of tougher capital requirements for the bank.

In remarks to CH Media, Keller-Sutter argued that relocating would be more expensive than complying with the new rules and would also be legally complicated. Her comments came after UBS Chairman Colm Kelleher warned last week that the bank could reconsider its Swiss base if capital rules became too harsh.

The upper house of parliament voted on Wednesday in favour of stricter capital standards. UBS estimates the measures could require it to hold about $18 billion in additional capital.

Lawmakers backed a proposal that would oblige UBS to back its foreign units with 90% Common Equity Tier 1 capital. They rejected an alternative favoured by the bank that would have split the requirement evenly between CET1 and Additional Tier 1 capital, which is cheaper to hold.

Keller-Sutter said UBS had "gone all out" in its lobbying, apparently assuming it would prevail in parliament. She added that the Swiss government had already made some compromises with the bank, a claim UBS rejected in comments earlier this week.