UBS Climbs to 17-Year High on Prospect of Capital Compromise

A group of influential Swiss lawmakers proposed watering down the capital demands that the country wants to impose on UBS Group AG, sending shares to a 17-year high as investors bet the initiative will ultimately pave the way for a compromise.

The senior legislators presented recommendations that would allow UBS to use a kind of junior debt known as AT1 bonds instead of equity as capital backing for its foreign units, potentially lowering the costs for the bank compared to the current government proposal. They also floated the idea to continue letting it use at least some of its software and tax credits to count toward the demands, though they also included a rule that would place a cap on investment banking growth.