UBS says government capital proposals would weaken bank and Swiss economy

UBS Tuesday said government proposals for Switzerland’s biggest bank to hold more capital would weaken the bank, the Swiss financial sector and the country’s economy.

The bank said it supported the Swiss government’s aims of learning lessons from the Credit Suisse crisis and strengthening the Swiss regulatory framework.

“However, the currently proposed capital measures do not meet these criteria,” UBS said in its strongly worded response to a government consultation on the measures.

As a result of the Credit Suisse takeover initiated by the authorities and the proposed adjustments, UBS would have to hold around $42 billion of additional capital, the bank said.

Instead, the measures would put “put UBS at a significant disadvantage in an international comparison, weaken the Swiss economy and the financial center, and take insufficient account of the lessons learned from the Credit Suisse crisis,” the bank said.