Federal Senate in Switzerland approves act giving the government direct authority over capital regulations for UBS bank
In a move aimed at strengthening banking regulations in Switzerland, the government has announced changes to UBS's core capital requirements. These changes, projected to increase UBS's capital requirements by approximately $11bn, are part of a wider effort following the 2023 collapse of Credit Suisse.
The proposed changes include measures that may increase UBS's core capital requirements by around $9bn. The government has outlined a strategy to minimize UBS's risk exposure, which includes a directive prohibiting UBS from including software and deferred tax assets in its core capital calculations.
The government plans to implement these changes through ordinance measures, establishing a baseline for additional capital requirements for UBS in the context of broader capital needs related to its international subsidiaries. This approach allows the government to enact the new capital rules by ordinance without further parliamentary approval.
The Swiss Senate has rejected a proposal requiring parliamentary review of all new capital regulations for UBS. In 2025, both the Council of States (Ständerat) and the National Council (Nationalrat) rejected proposals for parliamentary review of the stricter capital requirements for UBS before the law was implemented via ordinance.
Parliamentary committees expressed concerns about the process, suggesting all new capital regulations affecting major Swiss banks should be reviewed as a unified package by parliament. However, the Senate voted against this suggestion, mirroring a previous decision by the lower house.
UBS has raised objections to the proposed capital regulations, claiming they are disproportionate and could place the bank at a competitive disadvantage. The objections were not mentioned in earlier bullet points.
The proposed changes are in response to the need to safeguard against potential financial crises. The government's proposed changes for UBS's capital requirements could require up to $26bn in additional core capital. Certain threshold modifications could potentially reduce this increase by at least $1.8bn.
The new regulations are a significant step in the ongoing effort to strengthen banking regulations in Switzerland, following the collapse of Credit Suisse. The exact impact of these changes on UBS and the Swiss banking sector remains to be seen.
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