UBS, the Swiss banking giant that acquired troubledCredit Suisse, could have its assets reduced to a quarter of its holdings if aproposal by a section of lawmakers in Switzerland succeeds, according to a local media outlet.
Social Democratic Party (SP) is working on a proposal to cap the combined assets of UBS estimated at 1.5trillion Swiss francs. The left-wing party says the lender’s assets poseconsiderable risks to the country because the state backed its acquisition ofCredit Suisse.
UBS Poses Risks to the Country, Party Says
In April, the Swiss government saved theimminent collapse of Credit Suisse with a financial rescue packageguarantee of 109 billion Swiss francs. According to SamiraMarti, an SP party member who spoke with newspaper Aargau newspaperthe combined assetsof UBS and Credit Suisse have surpassed the Swiss GDP which currently stands at 771 billion Swiss francs. This ought to be capped to less than half the amount, Marti said.
Furthermore, the politician noted that if theParliament does not approve the limit cap, the alternative would be to have astringent capital requirement for UBS’s assets falling above half the GDP.
Government-Backed CHF 109B Guarantee
The Swiss parliament, a section of which opposed thegovernment-backed rescue deal for Credit Suisse during a symbolic vote, isreportedly discussing having a 15% equity requirement imposed against UBS. “Theaim is for UBS to become smaller,” Marti said, adding that “we have tomake improvements so that banks are less volatile.”
Credit Suisse’s problemsescalated when thelender announced significant asset outflows during the first quarter of the year, including aCHF 15 billion write-down in Additional Tier 1 (AT 1) capital notes ordered bythe industry regulator following the merger.
The lender’s reportedwealth management and net asset outflows were accompanied by massive stafflayoff, which started in January and lasted until March before the UBS-Credit Suisse acquisition wasannounced. Additionally, UBS announced36,000 job cuts in thefinance and tech sector after the acquisition.
Meanwhile, UBS is not only facingopposition from the Swiss legislator concerning its acquisition of CreditSuisse; the country’s prosecutors are also investigatingthe circumstances that surrounded the takeover to determine whether there was any criminal violation.
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UBS, the Swiss banking giant that acquired troubledCredit Suisse, could have its assets reduced to a quarter of its holdings if aproposal by a section of lawmakers in Switzerland succeeds, according to a local media outlet.
Social Democratic Party (SP) is working on a proposal to cap the combined assets of UBS estimated at 1.5trillion Swiss francs. The left-wing party says the lender’s assets poseconsiderable risks to the country because the state backed its acquisition ofCredit Suisse.
UBS Poses Risks to the Country, Party Says
In April, the Swiss government saved theimminent collapse of Credit Suisse with a financial rescue packageguarantee of 109 billion Swiss francs. According to SamiraMarti, an SP party member who spoke with newspaper Aargau newspaperthe combined assetsof UBS and Credit Suisse have surpassed the Swiss GDP which currently stands at 771 billion Swiss francs. This ought to be capped to less than half the amount, Marti said.
Furthermore, the politician noted that if theParliament does not approve the limit cap, the alternative would be to have astringent capital requirement for UBS’s assets falling above half the GDP.
Government-Backed CHF 109B Guarantee
The Swiss parliament, a section of which opposed thegovernment-backed rescue deal for Credit Suisse during a symbolic vote, isreportedly discussing having a 15% equity requirement imposed against UBS. “Theaim is for UBS to become smaller,” Marti said, adding that “we have tomake improvements so that banks are less volatile.”
Credit Suisse’s problemsescalated when thelender announced significant asset outflows during the first quarter of the year, including aCHF 15 billion write-down in Additional Tier 1 (AT 1) capital notes ordered bythe industry regulator following the merger.
The lender’s reportedwealth management and net asset outflows were accompanied by massive stafflayoff, which started in January and lasted until March before the UBS-Credit Suisse acquisition wasannounced. Additionally, UBS announced36,000 job cuts in thefinance and tech sector after the acquisition.
Meanwhile, UBS is not only facingopposition from the Swiss legislator concerning its acquisition of CreditSuisse; the country’s prosecutors are also investigatingthe circumstances that surrounded the takeover to determine whether there was any criminal violation.
Huobi HK launches; US approves Eurex BTC Futures; read today’s nuggets.
