Swiss Lawmakers Push for Stricter Capital Rules at UBS

The Council of States narrowly rejected a more lenient proposal that would have allowed for a 50-50 split between Common Equity Tier 1 and the cheaper Additional Tier 1 capital. Finance Minister Karin Keller-Sutter championed the stricter requirement, arguing that the bank’s balance sheet now dwarfs the national economy and necessitates ironclad protections against potential collapse.

UBS officials warn that these rules will compromise their global competitiveness, citing a projected $2.5 billion annual cost resulting from the Credit Suisse acquisition. The bank maintains that Swiss capital requirements are already among the world's most stringent. As the bill moves to the lower house, the prospect of such a massive capital lock-up has fueled speculation that the bank may eventually reconsider its Swiss domicile. A final legislative decision is not expected until 2027.