UBS offers to limit size of investment bank to appease Swiss regulators

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UBS has proposed caping to its investment bank size because it wants a compromise with Swiss regulators who are considering increasing the bank’s capital requirements after receiving credit swis.

According to a person who is known about the matter, the Lecturers can permanently limit the size of the division to reduce the risk. The investment bank already has 25 percent self-pressed limit UBSIts risk-free resources.

The proposal comes when UBS wants to eliminate anxiety to the regulators and politicians that the size of the combined group is a threat to Switzerland’s economy. Officials are pressing UBS to fully restore its foreign auxiliary agencies, a step that will increase its capital requirements to protect against potential future rescue.

However, bank officials have argued that the proposed capital reforms will damage its international competition and created tension between NDDist and Swiss organizations.

UBS chief executive Sergio Ermoti said last week that he “never expected the biggest obstacle to giving successful results from the same authority who asked us to accept the credit swice challenge”.

Meanwhile Carin Keller-Cler It was said that the government would not suppress the bank’s “intense” plan.

“Both of the UBS plan are visible and involuntary,” he told the local media last week. “The [government] There is a goal: that is a crisis, a UBS that is systematically important is solved. This means that the systematically important parts of the bank can be separated in Switzerland. ”

After the UBS state bail during the financial crisis of 20, it reduces some of its risky activities, imposing its own limitations to the investment bank and rebuilding it as a more conservative resource manager.

Last year, the UBS Investment Bank posted a pre-tax profit of $ 1.5 billion on revenue of nearly $ 1 billion, while its resource management business brought a pre-tax profit of $ 3.5 billion on revenue.

The law related to capitalization rules should go before Swiss lawmakers by May. The proposal to capped the investment bank was first reported by Reuters.

UBS says they support the government’s proposals in principle “financial stability”, but added that “compatibility with the regulatory structure should be noticed, proportionally and internationally.”

The bank says it opposed the “unnecessary systems” that would increase the cost for the bank and its customers and Switzerland was inconsistent as a competitive financial center.

It added, “UBS is already one of the best capital banks worldwide.”