ZURICH, April 8 Reuters Since UBS rescued its stricken rival Credit Suisse a year ago, it has been waiting to hear how authorities will protect Switzerland from the risk of the country39;s only remaining big bank also imploding. It is about to find out.

The Swiss government is this month due to publish its recommendations for policing banks that are too big to fail, which could saddle UBS with tougher business rules.

In what is expected to be a several hundredpage report, the capital requirement section will be particularly scrutinised, with UBS potentially having to find tens of billions of extra dollars to safeguard against a Credit Suissestyle meltdown.

Switzerland simply cannot allow UBS to fail, said Stefan Legge, an economist at the University of St. Gallen. If it did it would have an absolutely devastating effect on the Swiss economy.

At around 1.7 trillion, UBS39;s balance sheet is double the size of annual Swiss economic output, giving the bank an exceptional weight for a major economy.

Should UBS unravel, there are no local rivals left to absorb it. And the cost of nationalisation could shatter public finances, experts say.

The Swiss lower house of parliament in May 2023 backed a motion calling for systemically relevant banks to have a leverage ratio of 15 of assets, far more than in the European Union, the United States and Britain.

Based on common equity tier 1 capital of 79 billion, UBS had a 4.7 ratio at the end of 2023.

The higher ratio would…