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UBS on the brink of Switzerland's 'too big to fail' reckoning

>Since UBS rescued its stricken rival Credit Suisse a year ago, it has been waiting to hear how authorities will protect Switzerland from the risk of the country's only remaining big bank also imploding.
> The Swiss government is this month due to publish its recommendations for policing banks that are "too big to fail", which could saddle UBS with tougher business rules.
> At around $1.7 trillion, UBS's balance sheet is double the size of annual Swiss economic output, giving the bank an exceptional weight for a major economy.
> Should UBS unravel, there are no local rivals left to absorb it. And the cost of nationalisation could shatter public finances, experts say.
> The Swiss lower house of parliament in May 2023 backed a motion calling for systemically relevant banks to have a leverage ratio of 15% of assets, far more than in the European Union, the United States and Britain.
> The higher ratio would likely leave UBS needing to find well over $100 billion in additional equity, said Andreas Ita from consultancy Orbit36.
> "This can't be done within a reasonable period by withholding profits, and raising such sums via capital markets is hardly realistic," Ita said.
> "There is no plan B this time," he said. "The main policy will be hope – hope that UBS doesn't get into trouble. But hope is not a strategy."

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