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 proposed strict new capital rules that would require banking giant UBS to hold an additional $26 billion in core capital. The measures would also mean that UBS will need to fully capitalize its foreign units and carry out fewer share buybacks.

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”.