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(Bloomberg) -- The Swiss National Bank reiterated its support for a reform that could see UBS Group AG forced to maintain as much as $25 billion in extra capital.
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The Swiss government and regulator Finma are proposing that UBS fully deducts the value of its foreign subsidiaries from the capital of the parent bank, a move that UBS executives oppose.
“From a financial stability point of view, it is the best solution to back these foreign participations fully with capital,” SNB President Martin Schlegel said in an interview with Bloomberg Television on Thursday.
Schlegel spoke after the central bank’s rate decision, at which it trimmed the benchmark rate by a quarter point to 0.25%.
Legislation on the capital rules will go before Swiss lawmakers by May this year, with the earliest implementation likely only by 2028.
“We don’t comment on what UBS wants to do, it’s their decision,” Vice President Antoine Martin said at an earlier press conference, when asked about how UBS would respond to the moves.
Switzerland’s “long, long track record of stability” makes it “a good place to do wealth management,” Schlegel said.
--With assistance from Brenda Kerubo and Federica Romaniello.
(Updates with further Schlegel quotes)
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