Swiss Banks Face Rising Overseas Expansion Costs Amid New Regulations

Swiss Finance Minister Karin Keller-Sutter announced government proposals to bolster the Swiss finance sector's resilience, which may increase costs for banks like UBS to expand abroad. The regulations require big banks to fully capitalize their foreign units, potentially increasing capital by up to $26 billion.

Swiss Finance Minister Karin Keller-Sutter unveiled new government proposals on Friday aimed at strengthening the resilience of the Swiss finance sector. These measures could drive up expansion costs for major banks such as UBS, complicating their international growth efforts.

The proposals would require banks to hold up to $26 billion in core capital, forcing them to fully capitalize their foreign operations. These regulations are part of a broader strategy to ensure that Swiss banks remain stable and competitive.

According to Keller-Sutter, while the increased costs may affect overseas growth, the long-term benefits will be enhanced stability and attractiveness, particularly in asset management. She assured that the competitiveness of Swiss banks would remain intact under the new guidelines.

(With inputs from agencies.)