BERN, April 10 Reuters Switzerland39;s government said on Wednesday that UBS and three other systemically relevant banks must face tougher capital requirements to shield the country39;s wider economy, a year after the rescue of Credit Suisse.

In 209 pages of recommendations on how to police banks deemed too big to fail TBTF, the Swiss government pitched 22 measures for direct implementation. It stopped short of saying how far stricter capital requirements should go.

The TBTF plan will come under close scrutiny in Switzerland and beyond because if UBS were to unravel, there are no local rivals left that could absorb it. A bailout and nationalisation would likely cause serious damage to public finances.

The quantitative and qualitative capital requirements for systemically important banks should be tightened in a targeted way and supplemented with a forwardlooking component, the government said in a summary of its recommendations.

The increase in requirements for UBS will be substantial, especially if UBS were to retain its current size and structure, or even grow, it noted in an explanatory document.

Shares in UBS were down 1.9 at 1230 GMT after trading in them was briefly halted. UBS declined to comment on the report.

The Swiss governmentbacked takeover by UBS of Credit Suisse last year was the biggest merger of banks of systemic importance since the 20079 financial crisis.

Switzerland aims to put the measures into effect quickly and present two packages for…