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ZURICH—Swiss lawmakers may deliver a sharp reminder to the country's biggest banks, UBS Group AG and Credit Suisse Group AG, that they remain under close scrutiny at home.

On Wednesday, one chamber of Switzerland's parliament is expected to vote on proposed rules for the two Zurich-based global lenders, including a mandatory separation of their relatively risky investment banking units from other operations.

Other proposals include requiring the banks to hold the equivalent of as much as 10% of their loans and investments in the form of a capital buffer. Currently, Switzerland's big banks are required to maintain such so-called leverage ratios of slightly more than 4%.

The votes are part of a broader Swiss reconsideration of stability requirements for UBS and Credit Suisse. The country's Department of Finance is expected to issue its own proposed new rules for the banks, including a higher leverage ratio requirement, by the end of this year.

The shifting regulatory landscape reflects the sentiment that several years after the financial crisis, tiny Switzerland has yet to properly insulate itself from a failure of one of its banking giants. UBS received a government bailout in 2008, after racking up some $50 billion in losses. The traumatic rescue drew the ire of an alarmed Swiss public and policy makers.

UBS and Credit Suisse have each significantly bolstered their respective capital cushions recently, and launched restructuring intended to prevent trouble at one part of a bank from damaging the entire entity. But skepticism remains.

"We're still watching the banks," said Thomas Aeschi, a member of the Swiss People's Party. He said the proposals are a way of "keeping the pressure up."

If the proposals are approved on Wednesday, they could eventually be passed on for consideration by the seven councilors who make up the country's executive branch.

The proposals are supported by an unlikely alliance between Mr. Aeschi's right-wing party and the left-wing Social Democrats. The parties have a combined majority in the larger of the two chambers of parliament.

The Social Democrats are supporting a proposal put forward by Mr. Aeschi for a 6% leverage ratio requirement, while the Swiss People's Party is supporting the other party's motion to require a splintering off of investment banking from businesses like commercial banking.

Mr. Aeschi said his party isn't supporting a separate proposal from the Social Democrats for a 10% leverage ratio requirement, which is also expected to see a vote.

Luciano Ferrari, the head of policy for the Social Democrats, suggested that the support from his right-wing counterparts for tougher banking rules stems partly from an ugly historical episode for the guiding force behind that party: billionaire Christoph Blocher.

Mr. Blocher was ousted from the board of directors at Union Bank of Switzerland, which later merged with another bank to form UBS, in 1992.

Mr. Blocher brushed aside any notion of regulatory revenge. "I'm not against the big banks," he said. But Mr. Blocher said the issue of bank stability is particularly pressing in Switzerland, where the combined balance sheets of UBS and Credit Suisse are far larger than the country's economy. That could make bailing them out particularly painful. UBS Chief Executive Sergio Ermotti has dismissed that notion, telling The Wall Street Journal in July that it is merely " a way to scare people."

Mr. Ermotti's outspokenness has raised some eyebrows. "They'd become a bit modest after the crisis," Mr. Ferrari said of the big banks, "But they're both now back to their old way of thinking."

Spokesmen for UBS and Credit Suisse declined to comment.

Write to John Letzing at john.letzing@wsj.com

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(END) Dow Jones Newswires

September 15, 2015 14:35 ET (18:35 GMT)

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