Swiss lawmakers split over capital rules for UBS
Friday 18th September 2026 on 23:15 in
Switzerland
Swiss public broadcaster SRF reported that debate over new capital requirements for UBS remains unresolved, with positions divided over whether the bank must fully secure its foreign subsidiaries with hard equity capital or use a combination of equity and AT1 bonds.
The proposals follow UBS’s takeover of Credit Suisse in March 2023. The Swiss Federal Council has proposed changes to the “too big to fail” rules for systemically important banks.
Under the Federal Council’s proposal, foreign subsidiaries would have to be fully backed by hard equity capital. The parliamentary committee responsible for preparing the issue wants to ease the requirement: 50 percent would be covered by hard equity capital, while AT1 bonds could be used for the remaining 50 percent.
Social Democratic Party National Councillor Ursula Zybach argued that taxpayers should not have to rescue a bank for a third time. She said a full capital backing was the only correct solution because UBS collapsing could weaken Switzerland.
Swiss People’s Party vice-president Thomas Matter backed the 50-50 model. He said the result in a crisis would ultimately be the same as under the Federal Council’s proposal, with 100 percent hard equity capital, while the compromise would help UBS remain competitive.
Beat Walti, a National Councillor from the FDP, also supported using AT1 bonds. He said the bonds would have exactly the same effect on the balance sheet as long as they could be activated in time. A full backing with hard equity capital would cost UBS one billion US dollars a year, he said, with consequences for taxpayers as well.
Green Party National Councillor Gerhard Andrey opposed partial backing with AT1 bonds. He said the Federal Council’s proposal was realistic and would require UBS to build up nine billion in equity over seven years. UBS needed more capital to absorb shocks, he argued.
SRF economics editor Eveline Kobler said UBS was not claiming that building up equity was impossible. The bank was instead arguing that retaining profits for capital would reduce the dividends it could pay.