A major regulatory move is set to impact UBS as the Swiss government prepares to finalize new capital rules in April, marking a significant moment for the bank and the country’s financial system.
The proposed changes are part of wider banking reforms introduced after the 2023 Credit Suisse collapse. These measures are designed to improve financial stability and ensure large banks remain resilient during future economic shocks.
Among the key proposals is a requirement for stricter deductions from regulatory capital. This includes the full deduction of software assets and deferred tax assets, which could directly affect UBS’s capital position.
The new rules are expected to increase the bank’s capital burden significantly. Earlier estimates suggest UBS may need to hold an additional $24 billion to $26 billion in capital, mainly to provide stronger backing for its foreign subsidiaries.
UBS has opposed the proposed framework, stating that higher capital requirements could increase operational costs, reduce its global competitiveness, and impact Switzerland’s standing as a leading financial hub. The bank has also proposed alternative solutions, including the use of more cost-efficient capital instruments.
These developments follow UBS’s acquisition of Credit Suisse in 2023, a government-supported move aimed at stabilizing the financial system. Since then, regulators have been working on strengthening “too big to fail” norms to avoid similar risks in the future.
The April decision is expected to bring clarity on the final structure of these capital rules, with further legislative steps likely to follow.
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