UBS (UBSG SW) says if confirmed at the conclusion of the ongoing parliamentary process, today's decision by the Council of State would result in a further excessive tightening of Swiss capital requirements

This would come in addition to about USD 2bn of additional CET1 capital required at UBS AG as a result of the ordinance-level measures announced earlier this year. UBS says the proposed 90% plan is excessive and “not a compromise”; the ordinance-level changes announced earlier this year would eliminate an estimated USD 4bn of CET1 capital at the group consolidated level, while the total annual cost resulting from the acquisition would amount to around USD 2.5bn. UBS says the proposed backing of foreign participations with 90% CET1 capital would require UBS AG to hold approximately USD 16bn of additional CET1 capital.