3 MIN · A 3-minute read · Updated 30 October 2026
THE 10-SECOND VERSION
After Credit Suisse, Switzerland wants UBS to fully back its foreign subsidiaries with capital, and UBS puts the extra cost at about USD 18 billion.
WHAT'S HAPPENING
In March 2023 UBS took over Credit Suisse in an emergency rescue. FINMA's review found management failures, a loss of confidence and a weak capital position at the parent bank. The lesson Bern drew: the parent of a global bank must be able to absorb losses in its foreign units.
In April 2026 the Federal Council proposed that systemically important banks fully back their foreign subsidiaries with Common Equity Tier 1 (CET1) capital, the loss-absorbing core of a bank's equity. On 23 September the Council of States approved 90% backing instead of 100%. Parliament's work continues.
What does it cost? UBS's own calculation puts the additional CET1 needed at UBS AG at about USD 16 billion for that proposal, plus about USD 2 billion from ordinance measures, roughly USD 18 billion in total. These are estimates of requirements, not a bill paid in cash. More equity means the same profit is spread over a bigger capital base, so return on equity falls.
UBS is not short of earnings. On 28 October it reported USD 2.7 billion in third-quarter profit and a CET1 capital ratio of 14.7%. According to Reuters, CEO Sergio Ermotti said UBS was assessing its long-term ability to compete from Switzerland, with no rush to act. UBS has announced no decision to move.
Would leaving help? A Swiss government assessment reported by Reuters on 29 October found big obstacles, with US rules potentially absorbing capital comparable to full backing. Moving would trade one regulator for another.
THE NUMBER
USD 18bn
Extra CET1 capital UBS estimates for the current proposals. It is the sum of UBS's own estimates: about USD 16 billion for the participation rule as approved by the Council of States, plus about USD 2 billion from ordinance measures. The government and UBS calculate differently, so treat it as UBS's figure, not a settled bill.
WHAT IT MEANS FOR YOUR FRANCS
Clients: the debate is about how much equity UBS holds, not about client accounts. More capital is designed to make the bank safer, not riskier.
Shareholders: higher capital needs can mean slower buybacks during the build-up. The eventual share-price effect is not knowable in advance.
Taxpayers: the purpose of the rules is that a future crisis costs the state less. That is the trade-off parliament is weighing.
3 TERMS IN 30 SECONDS
CET1: Common Equity Tier 1: mostly shareholders' equity and retained earnings. The first capital to absorb losses.
Foreign participations: UBS's stakes in its subsidiaries abroad, such as in the US. The new rules target how these are backed at the parent bank.
Too big to fail: Swiss rules for banks whose failure would endanger the economy. They require extra capital and resolution plans.
WHAT TO WATCH NEXT
Further parliamentary votes on the capital bill.
UBS's next results and any update to its capital estimates.
Any formal statement from UBS on its headquarters.
THE 3-MINUTE TAKEAWAY
The fight is about who carries the risk if a global bank based in a small country fails. Bern wants more capital at the parent; UBS says the bill harms its competitiveness and is studying options. Parliament has softened the rule once already, from 100% to 90% backing. The final figure, and UBS's response to it, will shape Swiss banking for a decade.
GO DEEPER
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General information only, not investment, tax or legal advice, and not a recommendation to buy or sell any financial instrument. Figures come from the sources linked above and are preliminary. Independent; not affiliated with any exchange or authority.
Allgemeine Information, keine Anlageberatung. · Information générale, pas un conseil en placement. · Informazione generale, non consulenza in investimenti.