Swiss finance minister and UBS boss face off ahead of capital decision

Swiss Finance Minister ​Karin Keller-Sutter and UBS CEO ‌Sergio Ermotti ​on Tuesday defended their opposing views on new Swiss capital rules in a last round of appeals before ‌a key parliamentary decision on Wednesday.

Keller-Sutter, who oversaw the UBS takeover of Credit Suisse after the latter collapsed in 2023, said backing foreign units with 100% Common Equity ‌Tier 1 capital was the best way to protect taxpayers. Her proposal, which ‌has won backing from the Swiss National Bank, would make shareholders rather than taxpayer liable for losses, she told an event in Zurich.

Another proposal under consideration in parliament's upper chamber, which seeks ⁠90% ​CET1 backing of ⁠foreign units is close to the government's submission, Keller-Sutter added. Ermotti has rejected both outcomes as unacceptable ⁠and said the debate should acknowledge that UBS is not only a risk for Switzerland ​but also a benefit to its economy.

"We are very concerned that ⁠this would make us uncompetitive and ultimately call into question the sustainability of the business model," he ⁠told ​the same audience in Zurich. "Over the coming weeks and months, we will shape the future of the financial center for the next 10 ⁠to 20 years," Ermotti added.

Following the decision in the upper house, the capital rules bill ⁠will move ⁠to the lower house of parliament, with a final decision expected at the end of this year at the earliest, ‌and more likely ‌in 2027.