ZURICH, Feb 26 (Reuters) - New banking regulations for UBS could encounter substantial delays as Switzerland's finance ministry announced its desire for lawmakers to decide on crucial capital requirements, potentially pushing a referendum for approval at least three years into the future.
The ministry indicated in a statement that the amount of capital required for the foreign subsidiaries of a systemically significant bank will no longer be determined by government mandates but will fall under the purview of federal legislators.
While the government plans to release preliminary guidelines on the new regulations for banks considered "too big to fail" in May, involving parliament could postpone a final decision on capital necessities for Switzerland's major bank significantly, the ministry disclosed.
UBS mentioned that fundamental aspects of banking regulations are currently under "holistic" discussion through a legislative process.
Stating their position, UBS emphasized the need for any adjustments to be specific, proportional, and internationally synchronized, with a focus on competitiveness and economic impacts.
Under a revised, tentative schedule, parliament will address the capital requirements for a bank's foreign entities in 2027 when other banking reform initiatives are up for discussion. A prospective referendum on the updated capital regulations is not likely to occur before 2028, according to the ministry.
Lawmaker Celine Widmer from the centre-left Social Democrats expressed concern about the timeline, mentioning the combination of too-big-to-fail measures and the pace of decision-making as posing significant risks.
The decision to transfer the oversight of capital regulations to parliament requires confirmation from the governing Federal Council.
The finance ministry cited the conclusions of a parliamentary investigation into the 2023 crisis, prompting the shift to regulating this issue at the legislative level for parliamentary review.
Remaining capital requirements will continue to be determined through ordinances issued by the Federal Council, with an initial proposal slated for public consultation in late May, the ministry added.