Strengthening the Capital of Systemic Banks: What Are the Implications?

The debate around increasing capital requirements for so-called "Too Big To Fail" (TBTF) banks is gaining momentum. The Federal Council is considering tightening regulations to ensure greater stability within the Swiss banking system. While this is a commendable goal, such measures could have significant consequences for both the credit market and shareholders.

In an analysis published in the financial magazine L’Agefi, Daniel Steck, fund manager at Piguet Galland, warns about the potential impact of such requirements:

“If the Federal Council's capital requirements are too strict, UBS may significantly revise down its share buyback targets.”

He notes that the banking giant had planned to repurchase a greater volume of shares in 2026 than in 2022, amounting to USD 5.6 billion. A downward revision of these ambitions could affect share valuations and shareholder returns.

Beyond dividends, lending and mortgage conditions could also tighten.

At Piguet Galland, we closely monitor these regulatory developments, which influence both financial markets and investment strategies. Our experts support clients in understanding macroeconomic issues and adapting their portfolios with informed decision-making.

Read the full article on agefi.com (french only)