Swiss parliament backs plan to ease UBS capital demands

By the Editorial Team · Friday, September 25, 2026

Switzerland’s upper chamber approved a proposal requiring UBS to hold 90 percent of its top-tier capital against foreign subsidiaries, rejecting the government’s stricter full-deduction approach. The legislation, aimed at strengthening banking regulations after the Credit Suisse rescue, now moves to the lower house amid concerns that tighter capital rules could impact UBS’s operations and Switzerland’s banking landscape.

Switzerland’s upper parliamentary chamber has endorsed a proposal that would ease the new capital requirements imposed on UBS, while rejecting a more stringent measure put forward by the Swiss government. The vote on Wednesday sets UBS’s obligation to maintain 90 percent of its top-tier capital against its foreign subsidiaries, a figure lower than the full deduction of foreign investments initially proposed by the executive.

The capital-rules legislation, which aims to strengthen banking regulations following UBS’s rescue acquisition of Credit Suisse in 2023, will now proceed to the lower house for further consideration. The Swiss government’s original bill demanded that UBS fully deduct the book value of its foreign subsidiaries from its Common Equity Tier 1 (CET1) capital—the highest quality capital a bank holds. However, this stricter approach did not garner majority support in the upper house.

UBS has expressed concern that even the parliament-backed proposal would represent a severe tightening of Swiss capital requirements if enacted. The bank estimates that the current draft of the legislation could compel it to hold approximately $16 billion in additional CET1 capital. This figure marks a reduction from earlier estimates made in April, when UBS projected a need for up to $20 billion if full deductions were mandated.

The Swiss government had already scaled back aspects of its regulatory overhaul earlier this year, splitting the reform package into components subject to parliamentary scrutiny and those that are not. Lawmakers have been deliberating how best to structure the new capital rules in a manner that addresses market stability without unduly burdening UBS.

Market uncertainty regarding these evolving regulations has negatively affected UBS’s stock price and heightened concerns around the bank’s continued commitment to Switzerland as its operational base. In this context, UBS Chairman Colm Kelleher recently indicated that the institution might reconsider its presence in the Swiss market if capital demands become excessively restrictive.

Beyond the vote on capital deductions, UBS also welcomed a separate proposal from a faction of parliamentarians permitting the bank to satisfy up to half of the new capital requirements with Additional Tier 1 (AT1) capital—a lower-cost form of regulatory capital compared to CET1. Despite this, UBS criticized the parliamentary outcome for failing to address fundamental issues that contributed to the earlier collapse of Credit Suisse.

With the bill now moving to the lower house, the final form of Switzerland’s banking capital framework remains uncertain. Observers will be closely watching the legislative process to gauge how these rules might reshape UBS’s strategy and the broader Swiss banking sector.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.