The Swiss government on Friday proposed stricter rules for UBS following its takeover of Credit Suisse, which could make it hold $26 billion more in core capital, confirming some of the bank's worst fears about incoming new regulations.

The Swiss government has proposed increasing UBS’s capital requirements by up to $18bn in an attempt to reduce the risk of another Credit Suisse-style collapse, a move UBS previously called “extreme” and “excessive”.

At present, UBS is required to match 60 per cent of the capital at its international subsidiaries — such as the US and UK — with capital at the parent bank. Forcing the lender to match the entire capital at these units would increase its requirements by about $25 billion, according to the company and analysts.