UBS, Credit Suisse - Bad News On Capital, Good News On Bonuses

Moldy Swiss Cheese

Mixed news for our friends the big Swiss banks.

Reuters has reported the bad news (for the banks' stakeholders anyway) that a Swiss Parliamentary Committee has voted in favour of keeping proposed capital rules for an equity Tier 1 captal of at least 19% - significantly higher than Basel III global requirement of 8%.

Although Credit Suisse has said that Swiss capital requirements are 'tough but doable', UBS CEO Oswald Gruebel has come out and said that they may result in Swiss banks becoming uncompetitive, with all that that implies for stockholders, clients and employees.

The good news, though, is that the Committee has rejected calls to put a cap on bank bonuses (which would have limited them to no more than 50% of base salaries).

 

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