Swiss Capital Proposals Would Require About USD 24 Billion More CET1 at UBS, Bank Estimates

The Swiss Federal Council published regulatory proposals on 6 June 2025 that UBS estimates would require it to hold approximately USD 24 billion in additional common equity tier 1 capital, mainly through a requirement to fully deduct investments in its foreign subsidiaries from its CET1 base. When combined with capital obligations already in place, the proposals would bring the total additional CET1 capital requirement facing UBS to approximately USD 42 billion, according to the bank's own assessment.

UBS responded to the proposals with a statement expressing strong disagreement, characterising the requirements as 'extreme', disproportionate, and misaligned with international regulatory standards. The bank's objection centres on the argument that the Swiss proposals go significantly further than equivalent requirements imposed on peer institutions in other major jurisdictions, potentially placing UBS at a competitive disadvantage relative to its global rivals.

FULLY DEDUCTING FOREIGN SUBSIDIARY INVESTMENTS

The central mechanism of the Federal Council's proposal is the full deduction of investments in foreign subsidiaries from UBS's CET1 capital. Under the existing Swiss rules, the UBS AG parent bank backs only part of these investments with capital through risk weightings rather than deducting them in full.

UBS's international footprint was enlarged by its 2023 emergency acquisition of Credit Suisse.

The Federal Council's proposals follow the forced rescue of Credit Suisse in March 2023. Swiss authorities, including the Swiss Financial Market Supervisory Authority FINMA, have been reviewing the adequacy of the existing capital rules for UBS as it absorbed Credit Suisse.

UBS CONTESTS PROPORTIONALITY AND GLOBAL ALIGNMENT

In its public response, UBS said the proposed requirements were neither proportionate nor internationally aligned.

The Federal Council planned to put the legislative changes out to public consultation from autumn 2025, giving UBS and other stakeholders the opportunity to submit formal responses. The final shape of the requirements remains subject to revision.