Expert on banking regulation "A typical Swiss compromise"
The Federal Council has drawn conclusions from the CS disaster and decided on stricter rules for banks. Law professor Peter V. Kunz explains why UBS could live with the package.
22.04.2026, 19:57
22.04.2026, 20:01
SDA
No time? blue News summarizes for you
- In response to the CS disaster, the Federal Council has adopted a regulatory package that imposes stricter rules on banks.
- Systemically important banks will have to fully underpin their holdings in foreign subsidiaries with hard capital
- Peter V. Kunz, Professor of Business Law at the University of Bern, describes the package as a "typical Swiss compromise" and explains why UBS could live with the new rules.
Law professor Peter V. Kunz considers the banking regulation measures proposed by the Federal Council on Wednesday to be a "typical Swiss compromise" that UBS can live with. While the planned full capital adequacy requirements for foreign subsidiaries are likely to be watered down by parliament, the federal government has already made concessions to the big bank with regard to the Capital Adequacy Ordinance, as the professor of business law at the University of Bern explains.
Mr. Kunz, the Federal Council has presented measures for bank regulation and, above all, wants UBS to have to fully back its foreign subsidiaries with hard equity. It has also presented its plans for the future Capital Adequacy Ordinance. What does this mean for the big bank?
Peter. V. Kunz: It is a typically Swiss compromise that should be perfectly acceptable for UBS. Even if the bank itself doesn't say so. The Federal Council has accommodated UBS within the framework of the Capital Adequacy Ordinance with regard to the treatment of deferred taxes and software amortization.
UBS is, however, bothered by the full capital backing of its subsidiaries abroad. Will this be a major disadvantage for the bank in international competition?
Peter. V. Kunz: No. The US business, for example, will be more expensive for UBS. But the wealth management business will be positively influenced by the higher capital backing, because high equity will have a positive effect for bank clients.
Now the bill is going to parliament. What do you expect?
Peter. V. Kunz: Everything is open for UBS. The Federal Council is passing the buck to Parliament, which will probably significantly dilute the equity backing of the foreign subsidiaries.
How significant will this dilution be?
Peter. V. Kunz: I am convinced that the parliamentarians will not opt for full capital backing for foreign subsidiaries. They are likely to support a tightening compared to the current 45 percent, but certainly not 100 percent. After all, lobbying has been going on intensively for three years and UBS is likely to launch a new lobbying offensive.
But if the regulatory proposals are implemented as planned, would they make the Swiss financial center more resilient?
Peter. V. Kunz: In theory, yes. But it's never certain, as no one knows in which areas the next major crisis will break out. In addition, the issue of equity is only one problem. Risk management or the liquidity of banks are at least as sensitive issues. These are not dealt with in the revision.
Do you assume that UBS will move its headquarters from Switzerland to the USA, for example, because of the stricter capital rules?
Peter. V. Kunz: No, that was and is never a realistic scenario. UBS clients from Asia and South America in particular appreciate the fact that it is a Swiss bank and not a US bank. If the Democrats take over the presidency in the USA again in three years' time, banking regulations are likely to be tightened considerably. Why should UBS take such a "US risk"? The relocation was always just a threat.