Switzerland's upper house of parliament backed a fresh compromise requiring UBS Group AG to back 90% of the value of its foreign units with the highest-quality capital, known as CET1. That is less than the 100% backing the government has pushed for, but a departure from a compromise involving heavy use of convertible debt that UBS favored. UBS has said it is against the 90% solution, and CEO Sergio Ermotti has called it close to a worst-case scenario. The vote now moves to the lower house, which represents the people, after the upper house, which represents the cantons, gave its clear backing. Swiss Finance Minister Karin Keller-Sutter dismantled UBS's arguments in detail, and the outcome is expected to lower the bank's returns.
UBS Group AGSwiss upper house backed a compromise requiring UBS to back 90% of foreign units' value with top-quality CET1 capital, which UBS opposes and expects to lower returns.
