UBS may gain from capital rules going to Swiss upper house first, lawmakers say

ZURICH, March 16 (Reuters) - UBS may have gained ​a ⁠potential advantage in a long ​battle over Swiss government plans to raise its capital requirements, some lawmakers said, after ​a ‌parliamentary filing showed the proposal has been assigned to its upper house ⁠first.

If the government's bill begins there ⁠it is more likely to be ​softened than in the lower chamber, the lawmakers said. That could help set the tone for what is expected to be a ​long legislative ‌process for the bill.

The Swiss upper house's Economic Affairs and Taxation Committee is set to discuss the matter on May 4, after the government publishes its proposed banking regulation bill, a move ​expected before the end of April.

Other rules at the so-called ordinance ‌level will be enacted directly by the government and are expected to come into force in ‌2027.

The law determines how much capital UBS has to hold at home for its subsidiaries abroad. The government has proposed 100%, up from ​currently 60%, which the bank has said will hurt its competitiveness and with ‌it, Switzerland's financial sector.

Three members of the upper house committee, along with a fourth lawmaker from the lower house, in December pitched ⁠a compromise on ⁠capital, which could allow UBS to partially ‌back foreign subsidiaries with so-called AT1 bonds rather than more expensive Common Equity Tier ​1 capital.

UBS ​at the time called the compromise "more constructive" than the ‌government's approach.

Separate rules for banks that are deemed "too big to fail" will be sent to a public consultation later this year.