JPMorgan Sees UBS Compromise Cutting CET1 Need to $400 Million
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Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the worldAmericas+1 212 318 2000EMEA+44 20 7330 7500Asia Pacific+65 6212 1000Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the worldAmericas+1 212 318 2000EMEA+44 20 7330 7500Asia Pacific+65 6212 1000UBS Group AG’s need for the highest-quality form of capital would drop to around $400 million if a compromise proposal on controversial regulatory reforms put forward by Swiss lawmakers last week was adopted, according to estimates from JPMorgan Chase & Co analysts.The group of legislators proposed that UBS can use AT1 bonds — a type of junior debt — instead of more expensive common equity tier 1 capital for 50% of the funds it will need to give full backing to its foreign units at the level of the parent bank. The Swiss government’s proposal currently says it can only use equity capital, which can absorb losses more readily.