Zurich (Reuters) -UBS and Switzerland could find a compromise on the new equity requirements wanted by Bern following the Swiss credit rescue, sources close to the discussion said on Tuesday, after the bank said that the Swiss government’s proposals on the subject could weaken it and weigh on the country’s economy.

One person told Reuters that Berne could accept rules likely to lower the additional capital burden to around $ 15 billion. This is an amount that UBS could tolerate, two other people said in fact of the bank’s reflections.

All sources have stressed that the process was still far from finished and that nothing was decided. Reuters could not establish whether UBS and the government had discussed any concessions together. The final decision on the legislation which will set the new rules will not be taken by Parliament before next year at the earliest.

The Federal Finance Department said that the government was standing for its proposals and that it had not expressed its desire to reduce the additional capital burden to around $ 15 billion.

“The final decision will be taken by Parliament and, in the event of a referendum, by the people,” added the department.

“We are optimistic about the possibility of achieving a reasonable result,” said UBS.

MDS of additional capital

Earlier Tuesday, the bank said that it supported the government’s objectives aimed at learning from the Swiss credit crisis and strengthening the Swiss regulatory framework but criticized the requirements proposed by the government.

Following the repurchase of Swiss credit initiated by the authorities and the proposed adjustments, UBS should hold around $ 42 billion (35.78 billion euros) of additional capital, calculated the bank.

These measures “would place UBS in a very disadvantageous situation at the international level, would weaken the Swiss economy and the financial center, and would not take sufficient account of the lessons learned from the Swiss credit crisis,” said the bank.

UBS said that it opposed “extreme capital measures”, which, according to her, were neither “proportionate nor aligned internationally”.

The government will examine the comments of the bank, sector organizations and political parties before deciding on the procedure to follow.

As part of a plan to make the bank less risky, the government said in June that UBS should no longer be able to count software and delayed tax assets.

(Report of Ariane Luthi and Oliver Hirt, with Dave Graham and John Revill, Elena Smirnova and Bertrand de Meyer, edited by Augustin Turpin and Kate Entringer)

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