Coverage: weekly note · Information to 24 September 2026
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TGB Premium Intelligence · Research Note · 24 September 2026
Switzerland’s 90% rule
The UBS capital vote puts the parent bank, not the group ratio, at the centre of G-SIB resilience, just as the US moves the other way
The desk view
On 23 September 2026 Switzerland’s Council of States voted 29 to 16 to require UBS to back 90% of its foreign participations with CET1 capital. It rejected both the Federal Council’s 100% proposal and a committee compromise that would have allowed Additional Tier 1 instruments to fund half. UBS puts the extra CET1 at about USD 16 billion, taking its incremental capital since the Credit Suisse acquisition to about USD 33 billion. The vote is not final, but the direction is clear. Host-country ring-fencing has long trapped capital in subsidiaries. Switzerland is now pricing the reverse risk: losses at a subsidiary that eat into the parent’s capital. Other home supervisors, and the boards of every cross-border group, should expect the same question.
What the Senate decided, and what it did not
The Federal Council’s April 2026 dispatch proposed that systemically important banks fully back participations in foreign subsidiaries with CET1 capital. Under the current rules, roughly half can be financed with debt. The Federal Council proposed a seven-year transition, provided parliament does not cause delays. In UBS’s reading, the deduction would start at 65% in year one and rise by five percentage points a year to 100%.
The Council of States chose a middle path, although it did not use AT1. It backed 90% CET1 backing and rejected both the full-deduction proposal and the Economic Affairs Committee majority’s 50/50 split between CET1 and AT1. The bill now goes to the National Council. Deliberation there is expected in December 2026 at the earliest. A final outcome is more likely in 2027, and a referendum could extend the timetable further.
For AT1 investors, the signal matters beyond Switzerland. The role of AT1 instruments, which were written down at Credit Suisse in 2023, was the most contested point in the debate. This week the upper house declined to count it towards the parent’s cover for foreign participations. The Federal Council had already postponed separate AT1 adjustments pending international developments.
UBS incremental CET1 since the Credit Suisse acquisition, USD billions (bank estimates)
Source: UBS statement, 22 April 2026; UBS statement, 23 September 2026.