According to a recent Bloomberg report, draft legislation in Switzerland — an outline of which is expected to be published next month — would require UBS to fully back the capital of its foreign subsidiaries, potentially forcing the bank to hold up to $25 billion in additional capital.
This marks a key step in Switzerland's broader rethink of banking regulation following the near-collapse and emergency rescue of Credit Suisse in 2023. UBS, now a significantly more complex institution, faces demands to simplify its resolvability and reduce systemic risk. By forcing a one-to-one capital match for foreign units, regulators aim to prevent contagion within the group — a concern made more urgent by the firm's tightly integrated legal structure.
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