UBS CEO Ermotti warns against strict capital rules ahead of crucial Swiss vote

Sergio Ermotti has a message for Swiss lawmakers: push too hard, and you might push UBS out the door. The UBS CEO used an interview with Neue Zürcher Zeitung on September 20 to fire a warning shot at Switzerland’s upper parliament, which is set to vote around September 23 on new capital rules that could require the bank to hold roughly $20 billion in additional Common Equity Tier 1 capital. That kind of money doesn’t come cheap, and Ermotti made clear that the bill wouldn’t land exclusively on shareholders’ desks. Customers and employees would feel it too. The Credit Suisse hangover The proposed regulations trace directly back to the 2023 collapse of Credit Suisse, which UBS absorbed in a government-brokered rescue deal that created a banking giant with a balance sheet rivaling Switzerland’s entire GDP. Swiss politicians, understandably spooked by the idea of having to backstop another too-big-to-fail institution, have been working on rules designed to ensure UBS can absorb losses from its foreign subsidiaries without dragging the Swiss taxpayer into the wreckage. The government’s original proposal is straightforward but severe: require 100% CET1 capital backing for foreign subsidi...