Members of both the National Council and the Council of States have reportedly signalled to UBS that it should scale back its lobbying efforts regarding the capital adequacy ordinance. This was reported by the Financial Times, citing sources familiar with the matter.

Accordingly, CEO Sergio Ermotti’s public presence in opposing the proposed changes should be reduced. «A large part of Parliament actually agrees with the bank on an important point of contention, but we have told them that their lobbying, and particularly Ermotti’s statements, are currently not helpful,» one of the sources was quoted as saying.

Economic Affairs Committees Seek to Ease Capital Requirements for Subsidiaries

Another parliamentarian from the Council of States said the bank had been privately advised to «reconsider its lobbying campaign,» particularly as relations between the bank’s executive management and Finance Minister Karin Keller-Sutter have deteriorated.

Last November, the Economic Affairs and Taxation Committees of the National Council and the Council of States (WAK-N and WAK-S) presented their recommendations on the reorganisation of the capital adequacy ordinance. In December, a group of parliamentarians from the centre-right camp also put forward a compromise proposal. All of these plans envisaged a clear easing of the rules, particularly regarding capital requirements for foreign subsidiaries.

Firm Rejection by Keller-Sutter

This did not sit well with Finance Minister Keller-Sutter. In an interview with Finanz und Wirtschaft at the end of January, she firmly rejected the compromise proposals. She also dismissed the argument that the new regulation would place UBS at a disadvantage in international competition.

According to media reports, the dispute over capital requirements may also have implications for Sergio Ermotti’s succession planning. A report in the NZZ over the weekend suggested that he could remain in the CEO role until a final resolution on the matter has been reached.