Proposed UBS capital rules could drag on Swiss economy
A study by BAK Economics says proposed capital rules for UBS could reduce Swiss GDP by up to 3.9%. The report warns of a regulatory driven credit contraction.
A study commissioned by UBS GROUP AG-REG has warned that proposed capital requirements from the government of Switzerland could impose a lasting burden on the national economy. This finding comes amid a heightened debate over financial regulation following the 2023 collapse of Credit Suisse, which led to a state-engineered takeover by its larger rival.
The government's current plan involves a requirement for the bank to fully back its foreign units with Common Equity Tier 1 capital. Research conducted by BAK Economics suggests this move could shrink the nation's annual gross domestic product by 1.3% to 3.9% over the next decade.
