(GENEVA) Swiss banks UBS and Credit Suisse would have to set aside 70 billion Swiss francs (S$93.1 billion) more in company capital as Switzerland's banking watchdog moves to prevent a repeat of the sub-prime crisis, a Swiss newspaper reported yesterday.
Sonntag quoted parliamentarian Hans Kaufmann saying that the Federal Banking Commission would require additional provisions of '40 billion francs for UBS and 30 billion francs for Credit Suisse'.
Banking commission spokesman Alain Bichsel confirmed that a sum had been proposed and that the banks have until the end of summer to put forward their positions. 'We will issue the definitive provision in autumn,' he told the newspaper.
Both banks have been hard-hit by the US sub-prime mortgage crisis, with UBS writing down over US$37 billion in assets and Credit Suisse with around 10 billion Swiss francs in writedowns since the onset of the crisis.
Philipp Hildebrand, who is vice-chairman of the Swiss central bank's governing board, said last month that a higher capital requirement was needed.
He also suggested the introduction of a so-called leverage ratio which would put a limit on leverage to stop banks from overleveraging their assets.
Meanwhile, another newspaper Sonntagszeitung said yesterday that the commission had sent its proposed new regulations to the banks last week.
But Credit Suisse has already warned against these new measures. Bank spokesman Alex Biscaro told Sonntagszeitung that 'measures must be targeted at the actual problems'. -- AFP
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