ZURICH, Feb 26 (Reuters) - New banking rules for UBS

could face a long delay after Switzerland's finance

ministry on Wednesday said it wanted lawmakers to decide on key

capital requirements and that a referendum to approve them might

be at least three years away.

How much capital the foreign subsidiaries of a systemically

important bank must hold will no longer be regulated by

government-mandated ordinance, but by federal legislators, the

ministry said in a statement.

While the government will publish first guidance on new

rules for lenders deemed too big to fail in May, involving

parliament could defer a final decision on capital requirements

for Switzerland's last big bank by years, the ministry said.

UBS said central aspects of the banking regulation were now

being discussed "holistically" under a legislative process.

"Any adjustments to the requirements should be targeted,

proportionate and internationally coordinated, with particular

attention paid to competitiveness and economic costs," it said.

Under a new, provisional timeline, parliament will debate

how much capital a bank must hold for its foreign units in 2027

when other banking reform proposals are due to be discussed.

A potential referendum on the new capital rules would not

take place before 2028, the ministry said.

"I think it's right that too-big-to-fail measures like

capital requirements, the powers of the financial market

authority and a public liquidity backstop are being discussed

together, but the timetable is far too slow," lawmaker Celine

Widmer from the centre-left Social Democrats told Reuters.

"This entails enormous risk," she said.

The decision to move the capital rules matter to parliament

must be confirmed by the governing Federal Council.

Explaining the change, the finance ministry referred to the

findings of a parliamentary inquiry into the 2023 collapse of

Credit Suisse, which was bought by UBS in an emergency takeover.

"In light of its importance for financial stability and the

economy, and considering (the parliamentary) findings, it seems

appropriate to regulate this issue at the legislative level and

thus present it to parliament," the ministry said.

The remaining capital requirements will continue to be set

through ordinance issued by the Federal Council, with an initial

proposal put to public consultation at the end of May, it added.