Switzerland's Upper House Backs Capital Rule On UBS's Foreign Units; Arguments Continue

Tom Burroughes

24 September 2026

Yesterday, Switzerland's upper house of parliament voted for capital rules that would require , the country’s sole universal bank, to back its foreign units with 90 per cent Common Equity Tier 1 capital.

The move continues a row that has broken out between Zurich-listed UBS and lawmakers in Berne about the regulatory capital the bank should set aside to deal with potential crises. The issue has been brewing since UBS bought Credit Suisse in an emergency takeover three years ago, at the behest of the government. (See other coverage here and here.)

UBS worries that severe capital requirements will damage its ability to compete against international rivals. This week, UBS set out views in a policy paper. Yesterday, it commented on the upper house vote, stating: “If the decision by the Council of States is confirmed, UBS would be required to hold a total of around $33 billion of incremental CET1 capital since the acquisition of Credit Suisse.”

“In parallel, once implemented, the ordinance-level changes announced earlier this year would eliminate an estimated $4 billion of CET1 capital at the group consolidated level. The total annual cost resulting from the acquisition would amount to around $2.5 billion," it said.

The move could fuel speculation that UBS might rethink its Swiss capital base if rules become too severe.

"Hard equity is the most important lever in any crisis," finance minister Karin Keller-Sutter said before the vote, according to a Reuters report. The minister said Switzerland could not handle a potential collapse of UBS, whose balance sheet exceeds the Swiss economy. "That's why we need to set the necessary guidelines," Keller-Sutter told lawmakers.

The capital rules bill will now move to Switzerland's lower house, with a final decision expected at the end of this year at the earliest, and more likely in 2027.

The upper house narrowly rejected a proposal agreed last month by an upper house committee to allow UBS to back foreign units with 50 per cent CET1 capital and 50 per cent Additional Tier 1 (AT1) capital, a cheaper form of asset.

“If confirmed at the conclusion of the ongoing parliamentary process, today’s decision by the Council of States would result in a further excessive tightening of Swiss capital requirements, which are already among the most stringent globally,” UBS said in its statement.