UBS Pushes Back on Swiss Capital Overhaul as Lawmakers Prepare for Showdown
Published on 09/22/2026 at 07:20 | Editorial boerse-global.de
UBS has gone on the offensive in Bern, publishing a detailed position paper Monday evening that argues against tightening national capital requirements beyond what it considers workable. The timing is deliberate: the Council of States resumes its deliberations on the government's plans Wednesday, and the bank wants its objections on the record before Finance Minister Karin Keller-Sutter addresses the chamber.
At the heart of the dispute is how foreign subsidiaries should be capitalized going forward. The Federal Council's draft demands full coverage of 100% through hard core capital (CET1), a requirement UBS estimates would force it to raise roughly USD 20 billion in additional capital. Current rules stand at 45% CET1 plus 17% in additional tier 1 (AT1) capital.
A 50% Compromise Gains Traction
Lawmakers are weighing an alternative put forward by the Economic Affairs and Taxation Committee of the Council of States. That model would require foreign units to be backed by at least 50% CET1, with up to 50% covered through AT1 instruments. Under this scenario, UBS calculates it would need around USD 13 billion in AT1 funds.
The bank explicitly rejected an interim proposal that had circulated for a 90% CET1 ratio, arguing it does not represent a genuine compromise relative to the government's line. CEO Sergio Ermotti drove the point home, warning that both the 90% and 100% thresholds go too far.
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Board Chairman Colm Kelleher reinforced the message with a pointed caveat: should the bank's competitiveness be permanently impaired, it might have to reconsider its long-term future in Switzerland. Ermotti also invoked the 2023 Credit Suisse takeover, noting that the financial regulator Finma and the Swiss National Bank bear a share of responsibility for that episode.
Parliament Takes the Reins
The debate has already produced one tactical shift. The Council of States held its first reading of the proposal on Thursday, but the session was suspended after more than three hours. Before that, the chamber signaled it intends to handle the capital question itself rather than delegate the decision to the Federal Council — a move that prompted Ständerat Andrea Caroni to withdraw his motion to hand the matter to the executive. Market observers read that development as an interim win for the bank.
Wednesday's session is expected to feature Keller-Sutter's statement before the chamber votes on the framework. Investors are watching closely for any signal of how much Bern might ultimately load onto UBS as it absorbs Credit Suisse.
Balance Sheet Work Continues
Regulatory wrangling aside, the bank is pressing ahead with adjustments on the liability side. The maximum volume for a buyback offer covering six bonds was raised to USD 4 billion, up from USD 2 billion previously.
Its fund arm also weighed in. Kevin Zhao, Head of Global Sovereign Currency Fixed Income at UBS Asset Management, said Monday that further Japanese interventions to prop up the yen would present a selling opportunity.
Equity investors, meanwhile, have shown little sign of alarm. The stock closed yesterday at EUR 44.57, a gain of 1.2% on the day, and is up 12% since the start of the year.
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