The Swiss government proposed Wednesday tougher capital requirements for UBS and three other systemically important banks in a move to prevent another crisis like the collapse of Credit Suisse.

As part of a 209-page report, the Swiss government outlined 22 measures to strengthen the regulatory framework for banks deemed “too big to fail.” While the report did not specify the exact extent of the capital increase, the plan underscores Switzerland’s effort to shield the nation’s financial system from the repercussions of a potential unraveling of UBS.

“This is firstly about having additional preventative measures so that a bank can't even get itself into the kind of hopeless situation we saw with Credit Suisse,” Karin Keller-Sutter, head of the Swiss Federal Department of Finance, said at a press conference, according to Reuters.

UBS, Raiffeisen Group, Zürcher Kantonalbank and PostFinance are deemed systemically important Swiss lenders.

The UBS balance sheet, at roughly $1.7 trillion, is almost double the size of Switzerland's annual economic output. With no local rivals capable of absorbing UBS, a bailout or nationalization of the banking giant would likely strain public finances severely.

The quantitative and qualitative capital requirements for all of the systemically important banks must be tightened “in a targeted way” and include a forward-looking element, the government report said.   

It also added that increased capital requirements for UBS will be “substantial, especially if UBS were to retain its current size and structure, or even grow.”

The hastily arranged, government-orchestrated $3.25 billion takeover of Credit Suisse by UBS last March has put systemically important banks in the global spotlight. The Swiss Financial Market Supervisory Authority said in December that Credit Suisse came near collapse months before its eventual bailout.

The Wednesday report also mentioned giving additional powers to Finma, Switzerland’s independent financial-markets regulator. While imposing fines is a common regulatory practice in major financial hubs, a more cautious approach is warranted to prevent undermining banks' willingness to cooperate with authorities, according to Bloomberg.

The regulator, which faced criticism for its oversight of the bank, has called for stronger powers, including the authority to impose fines and the option to publish information on enforcement proceedings. It is also trying to implement a senior managers’ regime — a similar system in the U.K. — a set of rules that would make senior executives more accountable.

Keller-Sutter backed empowering Finma to impose fines earlier this year, a measure also supported by a government-appointed panel of financial experts.

“Certain measures including the possibility of fines for Finma are still being examined,” Keller-Sutter said Wednesday, according to Bloomberg. “That doesn’t mean that we don’t want them, but only that there are still open questions.”

However, Beat Wittmann, partner at Zurich-based Porta Advisors, told CNBC on Thursday that the tough banking regulations might limit UBS’ potential to challenge Wall Street giants. He claimed the report does not address the concerns about the ability of politicians and regulators to monitor banks while ensuring they can compete globally.

Finma “had all the legal backdrop, the instruments in place to address the situation but they didn’t apply it — that’s the point — and now we talk about fines, and that sounds like pennywise and pound foolish to me,” Wittman said.

The Swiss government usually prefers a more collaborative approach to financial oversight compared to other jurisdictions, while imposing fines is sometimes seen as a measure to end a cooperative environment, according to Bloomberg.

Echoing the sentiment of the lower house of parliament, which last month supported a motion to reclaim compensation from senior managers in cases where banks require public bailouts, Keller-Sutter said the government’s stance is to disincentivize reckless corporate behavior and excessive bonuses. She also outlined steps to ensure such compensation can be clawed back.

She criticized excessive banker pay, highlighting that she would have to work for 30 years to match the 14.4 million Swiss franc ($15.8 million) package received by UBS CEO Sergio Ermotti in 2023, which made him the best-paid European bank CEO, according to a comparison drawn by Reuters.

UBS declined to comment to Reuters on the finance minister's remarks.

"I cannot comprehend certain sums," Keller-Sutter said. She earns 473,000 Swiss francs a year as a member of the Swiss cabinet, according to the government, Reuters reported.

“I may be a bit old-fashioned, but as a child I once learned that the measure of all things is the salary of a Federal Councillor," she noted. "Well, that hasn't been the measure of all things for a long time, has it?"