Swiss lawmakers weigh cheaper compromise on UBS capital rules

Swiss lawmakers are considering a compromise that could reduce the cost for UBS Group AG to meet the government’s $20 billion capital demand, according to Bloomberg.

A parliamentary committee is examining reforms to Additional Tier 1, or AT1, bonds. The changes would allow the instruments to absorb losses earlier in a crisis, a function they did not perform during Credit Suisse’s collapse three years ago.

UBS has argued that a large increase in equity capital would make it less competitive. The bank has supported strengthening AT1 instruments if the changes remain aligned with international standards, while opposing what it called extreme proposals.

A committee vote on UBS capital proposals is expected on Aug. 31. UBS shares were little changed Thursday, and parliamentary decisions are not expected to be final until next year at the earliest.

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