UBS Urges Swiss Lawmakers To Adopt Compromise Capital Requirement

Tom Burroughes

22 September 2026

has urged policymakers to adopt a proposed compromise on Swiss bank capital requirements, continuing a debate about regulatory changes three years after UBS’s emergency takeover of Credit Suisse.

A few weeks ago, the Economic Affairs and Taxation Committee of the Council of States (WAK-S) proposed a compromise on Swiss banking capital requirements, allowing UBS to meet roughly half of its increased backing for foreign subsidiaries using Additional Tier 1 (AT1) bonds instead of pure equity. UBS had feared that requiring 100 per cent equity backing would put it at a competitive disadvantage against foreign rivals. (See coverage of developments here.)

The Zurich-listed lender, which is now Switzerland’s sole universal bank, issued an additional position paper yesterday.

“UBS supports regulatory adjustments that are targeted, proportionate, internationally aligned and address the causes of the Credit Suisse crisis,” the bank said.

The bank said AT1 bonds are an “established component of the regulatory framework in Switzerland and internationally”; it said the WAK-S majority proposal to strengthen AT1 bonds is “internationally aligned and reflects established market practice.” UBS said it was confident that investors could absorb any additional AT1 bonds.

The bank said AT1 instruments can, in a crisis, be used to generate Common Equity Tier 1 (CET1) capital “instantaneously.” “They therefore constitute a highly effective early-intervention instrument,” it said.

“The 50/50 majority proposal of the WAK-S protects taxpayers just as effectively as the Federal Council's proposal because it triggers stabilising measures significantly earlier while being more cost-efficient,” it said. “Without the regulatory filter, the WAK-S‘s 50/50 model would already have made Credit Suisse’s problems visible in 2021 and forced countermeasures such as dividend suspensions and bonus cuts,” it said.

The bank added that the costs of “extreme regulation” would harm the Swiss banking sector.

For months, UBS has tussled with the government in Berne over proposals on how much shock absorber capital it should be forced to set aside. In March 2023, UBS bought Credit Suisse at the Swiss government’s request after Credit Suisse was hit by a string of scandals and missteps. The takeover revived fears of creating a banking empire that would be “too big to fail.”

Legislators want to balance protecting taxpayers from a future banking crisis against the bank's concerns that tougher capital requirements could undermine its competitiveness.