Swiss financial regulator FINMA has asked UBS to temporarily increase its capital reserves by 50%to to cover an expected escalation in legal charges, swissinfo.ch has reported.
Earlier this month, FINMA commenced an investigation into suspected rigging of foreign exchange rates by several unnamed Swiss financial institutions.
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UBS, which is currently being investigated by a number of countries for alleged malpractice, said that it had set aside CHF586 million (US$654 million) in the third quarter of 2013 to cover potential regulatory and legal costs.
It is estimated that the bank might have to pay US$1.5 billion in form legal bill to various global regulatory authorities in connection to Libor rate rigging offences.
Recently, UBD paid CHF885 million to settle claims in the US to settle charges that had miss-sold mortgage-backed securities just before the financial crisis broke.
Speaking to Swiss Public Radio, RTS, UBS chief executive Sergio Ermotti said: "It’s a temporary situation. Finma has imposed a temporary add-on. We are still the best capitalised bank in the world."
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