Switzerland’s Finma Pushes Back Against Calls to Protect UBS

(Bloomberg) — Switzerland’s financial watchdog signaled it’s opposed to giving UBS Group AG any special treatment to aid its competitiveness against global rivals, as the country undergoes a regulatory overhaul following the collapse of Credit Suisse.

With the Swiss government likely to substantially raise the capital requirements for its largest bank in the coming months, UBS executives and lobbyists have been arguing that doing so will hurt a national champion. Concern over the move helped send UBS shares down 7% on Tuesday, despite a robust earnings report.

Addressing journalists on Wednesday, Finma’s Stefan Walter insisted that the best way to ensure the Swiss finance industry stays competitive is to strengthen the sector’s stability and reputation by good oversight.

“A direct mandate for competitiveness opens the door to conflicts of interest, political intervention or excessive lobbying by the supervised parties,” he said in Zurich. The regulator should instead focus on “the protection of creditors and the functioning of financial markets.”

The government plan to increase requirements for Switzerland’s one remaining global lender could result in increased capital demands of as much as $25 billion. 

UBS Chief Executive Officer Sergio Ermotti has said such an outcome would be “an extreme overreaction” that would hurt competitiveness and make banking services more expensive. While Finma has argued for the strongest measures in response to the crisis — including forcing UBS to maintain 100% capital backing against its foreign units — it is ultimately the government and parliament which will decide the final outcome. 

Walter reiterated that Finma lacks key powers which are in the standard toolkit of other regulators. As an example, he mentioned that the Swiss supervisor can only act to curb bankers’ bonuses if a lender has already received government funds to stabilize it.

He also reiterated earlier demands that Finma needs abilities to fine banks, to intervene earlier and to publish concluded enforcement proceedings.

Walter said it was important that the regulator can work “independently and without undue pressure” from politics or the financial institutions it supervises.

The government is due to present a draft ordinance detailing how much UBS’s capital requirements should rise in the spring.

Pushing back against the prospect of a more regulation, Swiss business and banking lobbies have argued that the main problem in the Credit Suisse crisis was that Finma didn’t fully utilize the powers it already had. A parliamentary report in December made a similar point. 

“It would be wrong to impose conditions on UBS that would hinder it in international competition,” the largest Swiss business lobby, economiesuisse, said on Tuesday. “Switzerland needs a strong UBS.”

(Adds further Walter comments)

©2025 Bloomberg L.P.