Swiss Parliament Debates Higher Capital Requirements for UBS
Swiss lawmakers are debating new capital requirements for UBS that could force the bank to move its headquarters to avoid strict regulations.
The Swiss upper house of parliament passed rules requiring UBS to back its foreign units with 90% Common Equity Tier 1 (CET1) capital, an increase from the current 60%. This measure follows the 2023 collapse of Credit Suisse and comes as a compromise after the Swiss government proposed a 100% requirement.
UBS management has labeled the 90% proposal as excessive and damaging to its competitiveness. In response, the bank is reportedly drafting contingency plans to shift its headquarters out of Switzerland. Some major investors, including Artisan Partners, have publicly urged the bank to leave the country to avoid the new regulations.
Lawmakers remain divided on the appropriate threshold. Hans-Peter Portmann of the Liberal Party proposed a lower 75% requirement combined with a loss-absorbing mechanism. Other legislators warn that overly strict rules could drive the bank abroad, while lax rules might trigger a public referendum. A lower house committee will begin debating the rules on October 26, with a final decision expected in December at the earliest.
