UBS CS To Hold 19% Risk-Weighted Assets

According to the proposals of a government committee, the two biggest banks of Switzerland, UBS AG

and Credit Suisse Group AG

, would be required to hold total capital equivalent to 19% of their risk-weighted assets. The committee was deployed in order to find ways to restrict the economic risks posed by banks. Also, the banks will have to hold 10% of risk-weighted assets in the form of common equity. The levels are much higher than the Basel III international standards, which were agreed recently. The standards require a minimum of 10.5% for total capital and 7% for common equity. The committee said in a statement, “The proposed policy mix is designed to prevent the state from being forced to step in again and assume significant financial risks in order to bail out a systemically important bank.” Shares of CS gained 0.39% to $43.41, while UBS shares gained 0.23% to $17.16 in pre-market trading. Read more