ZURICH: The Swiss government is set to decide in April on how much additional capital it wants UBS Group AG to hold, as the administration finalises new regulations following the collapse of Credit Suisse.
The Federal Council will determine new rules for the valuation of intangible capital, SonntagsBlick newspaper reported on Sunday, without saying where it got the information.
Separately, a Parliament document showed that the executive will also decide on a proposal for capital backing of the lender’s foreign units.
The two measures are central to the government’s reform agenda adopted after Credit Suisse failed and was subsequently taken over by UBS.
Additional capital requirements of as much as US$26bil are being discussed to make UBS more resilient in the event of a future crisis.
The government intends to require the bank to fully deduct the value of software and deferred tax assets from its regulatory capital, SonntagsBlick reported.
All ministers are in favour of this stance, the newspaper said.
The new rules are due to take effect from Jan 1 with a phase-in period.
The finance ministry said the government will decide within the first half of this year on the matter.
UBS declined to comment.
According to the parliament schedule, lawmakers are set to debate a new law governing how much capital the parent bank has to hold against its foreign units in early May.
That gives the government only until April 22, when it holds a scheduled meeting, to decide on the draft bill.
While parliament will determine the capital backing required for foreign participations, the government can decide the rules for assets valuation.
SonntagsBlick reported that ministers intend to decide on their stance in both issues on the same date.
In January, people familiar with the executive’s thinking told Bloomberg that the government is likely to insist on full-backing of foreign units, but remains open to softening the requirement to fully deduct software and deferred tax assets. — Bloomberg
