UBS Group AG Chairman Colm Kelleher underscored on Wednesday that the bank is "not too big to fail" and expressed concern about the government's proposal to impose tighter capital requirements to protect the country's economy.

Earlier this month, the Swiss government stated that UBS' rescue of the troubled Credit Suisse last year "succeeded in safeguarding financial stability and preventing damage to the economy and the taxpayer." The proposed measures would look to "significantly reduce the likelihood that another systematically important bank in Switzerland will experience a severe crisis and that emergency measures by the state will be necessary."

The proposed package would also give more power to the Swiss financial regulator FINMA to impose "corporate governance" and "more accountable risk management" of systematically important banks, including managers' regimes and rules on bonuses. "In a crisis, systematically important banks must be able to exit the market in an orderly manner," the government explained.

The bank's stock traded 1.05% lower at 10:50 am CET, trading at 25.500 Swiss francs a piece.