Latest news with #bankingregulations
Reuters
4 days ago
- Business
- Reuters
UBS faces tough new Swiss banking sector rules
BERN, June 6 (Reuters) - The Swiss government on Friday proposed stricter rules for UBS (UBSG.S), opens new tab following its takeover of Credit Suisse, which could make it hold $26 billion more in core capital, confirming some of the bank's worst fears about incoming new regulations. The key proposal, which the bank would have six to eight years to prepare for after it became law, is that UBS must fully capitalise its foreign units, confirming what many analysts, lawmakers and executives had been expecting. The government said its capital requirement proposal would allow UBS to reduce its holding of Additional Tier 1 (AT1) bonds by $8 billion. Today, UBS must only 60% capitalise its foreign units and can cover some of the capital with AT1 debt. UBS executives say the additional capital burden will put the Zurich-based bank at a disadvantage to rivals and undermine the competitiveness of Switzerland as a financial centre. Shares in the bank rose after the government unveiled the proposals on Friday afternoon, climbing by more than 6%. Such was the shock in Switzerland over the 2023 collapse of Credit Suisse that top politicians led by Finance Minister Karin Keller-Sutter vowed to introduce more robust rules that would protect taxpayers and prevent another meltdown in future. Keller-Sutter now holds Switzerland's rotating one-year presidency and Friday's announcement will start a long period of political wrangling over the measures, which the governing federal council called "targeted and proportionate." "They strengthen trust in the financial centre, which, in the view of the federal council, is central to its stability and competitiveness," the council said in a statement. A parliamentary inquiry last year noted that since UBS bought Credit Suisse for 3 billion Swiss francs ($3.65 billion) in March 2023, it has had a balance sheet bigger than the Swiss economy, and urged the government to take the foreign units into account. The federal council said it would present drafts on the proposals for consultations with stakeholders in the second half of 2025. Finance Ministry officials say laws requiring parliamentary approval will not enter force before 2028. Separate measures known as ordinances that can be issued directly by the government could apply from the start of 2027. A six to eight-year transition period looked appropriate for UBS to meet new rules on capitalising foreign units from when they come into force, the government said. That could give the bank until the mid-2030s to comply. UBS's shares have lagged European peers in anticipation of the tougher rules and sources inside the bank have warned the new regulations could make it an appealing takeover target. Under the Swiss proposals, UBS's Common Equity Tier 1 (CET1) capital ratio could end up somewhat higher than those of global rivals, the government said. UBS's CET1 ratio of 14.3% could rise up to 17%, above rivals like JPMorgan (JPM.N), opens new tab at 15.8%, Morgan Stanley (MS.N), opens new tab at 15.7%, and 15.3% at Goldman Sachs, it said. Shares in UBS rose more than 60% in the 12 months following its acquisition of Credit Suisse. But the stock has since sharply underperformed; UBS shares have lost about 5% in the past year, while a top European banking index (.SX7P), opens new tab climbed 37%. Analysts say the new regulations could trigger a rejig of UBS's business model, which now focuses on growth in the United States and Asia. To take the edge off the rules, the bank may be tempted to sell some assets, banking experts say. The Swiss government also set out piecemeal reforms to bolster the market regulator FINMA, which was heavily criticised for its response to the Credit Suisse collapse. These include measures aimed at holding bankers to account, giving the regulator the power to impose fines and making it easier to restrain pay and claw back bonuses. Still, the proposals come years after the European Union introduced similar measures in the wake of the 2007-2009 financial crisis. The government also proposed making it easier for banks to access liquidity from the Swiss National Bank. Barriers to transferring collateral to the SNB will also be removed. ($1 = 0.8222 Swiss francs)
Reuters
23-05-2025
- Business
- Reuters
India central bank reviewing shareholding norms for banks, says chief Malhotra
MUMBAI, May 23 (Reuters) - India's central bank is examining foreign shareholding norms and licensing rules for banks as a part of a broader review, Governor Sanjay Malhotra said in an interview published by The Times of India on Friday. "We are examining this in totality as part of our internal examination. We will review all aspects of the eligibility conditions," Malhotra told the newspaper when asked about increasing shareholding limits further, in particular for foreign banks wanting to come to India. The Reserve Bank of India is also examining the need for scaling up banks to manage the increasing needs of the economy, the governor told the newspaper. Malhotra refused to comment specifically on the troubles at private lender IndusInd Bank ( opens new tab but said the system as a whole "is very robust and strong. There are no systemic risks or concerns."
Bloomberg
22-05-2025
- Business
- Bloomberg
EU Set to Delay Implementation of New Trading Rule for Banks
The European Commission is set to recommend a fresh delay to the adoption of new trading book rules that govern the trading activities of banks, according to people familiar with the matter. The bloc is likely to delay the Fundamental Review of the Trading Book to January 2027 as it waits for clarity on how the US plans to implement the Basel rules, the people said, asking not to be identified discussing internal debates.
