ZURICH, Sept 29 (Reuters) - UBS Chair Colm

Kelleher warned on Sunday that the Swiss government's plans to

strengthen capital requirements for big banks could damage the

country's position as a financial centre.

The government earlier this year laid out plans for tougher

capital requirements for UBS and Switzerland's three other big

banks in a bid to make the financial sector more robust after

the crash of Credit Suisse last year.

In an article published in the Swiss newspaper

SonntagsBlick, Kelleher said he agreed with most of the 22

recommendations in the government's report, except for the

proposal for more stringent capital requirements.

"What I really have a big problem with is the increase in

capital requirements. It just doesn't make sense," he said about

the so-called "too-big-to-fail" report.

Details of the exact capital requirements are yet to emerge,

although Finance Minister Karin Keller-Sutter in April said

estimates UBS will require another $15 billion to $25 billion

were "plausible".

In a separate estimate, analysts at Autonomous Research said

UBS may need to retain an additional $10 billion to $15 billion.

Kelleher declined to comment on figures, but said that

excessive capital requirements would damage competitiveness and

lead to less favourable prices on banking products for

customers.

"We should focus on more important issues such as liquidity

management and, above all, the full resolvability of a bank,"

Kelleher told the newspaper.

Swiss banks contribute to its role as the world's top

financial centre, with some $2.6 trillion in international

assets under management, according to a 2021 Deloitte study.

However, competition is rising from Luxembourg and in particular

Singapore, which has grown rapidly in recent years.

UBS - which has a balance sheet double the size of annual

Swiss economic output - would pose dire risks for the Swiss

economy if it were to collapse, experts have warned.

Kelleher downplayed the dangers, saying UBS held

"significantly more" capital than comparable banks, while the

bank's business model - based on wealth management and the Swiss

domestic market - meant it was low risk.

UBS remained committed to Switzerland even if Bern demanded

a big increase in extra capital, said Kelleher, who has been

chair since 2022.

"Although we are a global bank, the heart of UBS is our

Swissness," he said, adding there was "no question" the lender

would quit its home country.

Still he warned if the bank had to raise its capital levels,

it would be detrimental for Switzerland.

"If politics forces us to massively increase our capital,

then Switzerland has decided that it no longer wants to be a

relevant international financial centre," Kelleher said.

"I think that cannot be in the country's interest."

The former Morgan Stanley executive said he was ready

to speak with the government on its proposals.