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Switzerland advances regulatory reforms following Credit Suisse collapse
['Editorial Team']
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For UBS, the only bank that really matters in this conversation after absorbing Credit Suisse, that translates to an estimated $20B in additional capital requirements.
The CET1 hammerCET1 capital is the highest-quality form of bank capital, essentially equity and retained earnings that can absorb losses without the bank needing to shut its doors.
The new mandate specifically addresses a vulnerability exposed during the Credit Suisse crisis: parent banks operating sprawling international networks without sufficient capital ringfenced at home to cover potential losses abroad.
For context, Credit Suisse’s market capitalization had been north of $30B just a few years earlier.
Given the political consensus around preventing another Credit Suisse scenario, significant dilution of the package seems unlikely.