This content was published on
June 25, 2026 - 11:49
2 minutes
(Bloomberg) — The Swiss government’s plan to make UBS Group AG hold significantly more capital was praised wholeheartedly by the International Monetary Fund.In remarks on its annual assessment of the Swiss economy, mission chief James Walsh said Thursday that the fund “strongly” supports the government’s proposal to require the bank to fully back foreign units in high-quality, so-called CET1 capital at its parent entity.“CET1 is the highest-quality form of capital,” he said. “It is the best way to improve confidence in the market, and the best way to insulate Swiss taxpayers from potential fiscal losses.”The government’s plan is currently making its way through parliament, with a final vote expected not before next year. Lawmakers are pondering whether to water down the required capital backing, Bloomberg has reported.In a statement, the fund added that the proposal is “targeted, commendable, and in line with recommendations” in the IMF’s Financial Sector Assessment Program.“Ongoing increases” in the staffing of financial regulator Finma “and proposed increases to its powers are welcome” it added in its statement.“This includes enabling Finma to fully mandate and oversee external audit, and to further limit suspension of enforcement of Finma decisions during legal appeals,” the fund said.The IMF also said:“The SNB’s new Extended Liquidity Facility, to be introduced in 2027, will enhance the safety net, and final approval of the long-standing proposal to fund a public backstop would further reinforce stability.” “The macroprudential framework and toolkit should be strengthened to address rising systemic risks.” “With the sectoral countercyclical capital buffer (SCCyB) already fully deployed, new measures, such as borrower-based measures that target affordability, a higher limit on the SCCyB, or higher risk weights could help contain vulnerabilities.” “Complementary policies to streamline approvals and ease permitting would facilitate construction, reducing pressure on real estate markets.” ©2026 Bloomberg L.P.
