Council of States weighs stricter capital rules for UBS subsidiaries
Thursday 17th September 2026 on 06:30 in
Switzerland
Switzerland’s Council of States will decide on Thursday how UBS should better protect its foreign subsidiaries, SRF reported. The Federal Council, UBS and the chamber’s Economic Affairs and Taxation Committee disagree over the proposed rules.
The measure is part of a package of reforms drawn up by the Federal Council after the failure of Credit Suisse. The government says the fact that the major bank had only partly backed its foreign subsidiaries with equity capital was a central weakness during the crisis.
The Federal Council wants UBS to back its holdings in foreign subsidiaries with 100 per cent hard equity capital in future. That would be more than double the current legal requirement. The change would require UBS to provide around 9 billion US dollars in additional capital, according to a Federal Council calculation from the end of 2025.
The Council of States committee has proposed a different model. It says the Federal Council’s plan would restrict UBS’s competitiveness too severely. Under the committee’s proposal, 50 per cent would have to be covered by hard equity capital, while the remaining half could be secured with AT1 bonds, a form of debt capital.
UBS rejects the Federal Council’s proposal outright and says the committee’s alternative would also impose considerable additional costs. The bank argues that other major financial centres are simplifying and streamlining their regulatory frameworks for banks.
The Swiss National Bank and the Swiss Financial Market Supervisory Authority oppose the committee’s alternative. The central bank says it would create additional risks for the state and taxpayers. FINMA warns that the model could create false incentives and even intensify a crisis.
The Council of States must first decide whether to consider the bill in detail. Liberal Party member Andrea Caroni of the canton of Appenzell Ausserrhoden has submitted a motion not to proceed with the proposal. His aim is to send the matter back to the Federal Council for further review.