UBS Group (UBS) is expected to lose its initial bid to ease a Swiss proposal requiring higher capital reserves for foreign subsidiaries, Bloomberg reported Tuesday, citing sources familiar with the matter.

A draft law due on June 6 would require UBS to fully back losses at its overseas units, increasing coverage from 60% to 100%, the report said.

The requirement is part of a broader post-Credit Suisse overhaul that could add as much as $25 billion in capital needs for UBS, the report added.

Despite lobbying efforts from UBS and CEO Sergio Ermotti, regulators and the Swiss Federal Council are pushing for stricter rules, the news outlet reported.

A finalized bill is expected next year, with debates and votes likely concluding by 2027, while a potential public referendum could delay implementation until 2029, the report said.

UBS declined MT Newswires' request for comment, while the Swiss government did not immediately respond.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)