SNB Welcomes 90% UBS Capital Plan Adopted by Upper House
(Bloomberg) — The Swiss National Bank cautiously welcomed lawmaker backing for a plan to impose higher capital requirements on UBS Group AG, adding its support to a measure that’s widely seen as a setback for the country’s largest bank.
A large majority in the upper house of Switzerland’s parliament on Wednesday endorsed a proposal that would require UBS to hold equity capital at its domestic unit worth 90% of its subsidiaries abroad. That would raise requirements for the lender by some $16 billion in extra CET1 capital, it has estimated.
“90% is a good amount of CET1 capital to back foreign participations,” SNB Vice President Antoine Martin said at a press conference for the central bank’s interest rate announcement on Thursday. “100% would have been even better from the perspective of financial stability — but we respect the decision of parliament.”
If ultimately turned into a law, the measure would be a relatively small tweak to the government’s original plan of 100% backing. Finance Minister Karin Keller-Sutter, who’s been spearheading the effort to impose the fresh capital demands, has endorsed the 90% decision, while UBS has sharply criticized it.
“This political outcome is not a compromise and fails to address the root causes of the Credit Suisse collapse,” the Swiss lender said in a statement following the vote. “As the parliamentary process continues, UBS will focus on protecting its long-term interests.”
The parliament’s lower house is next to discuss the matter.
UBS bought Credit Suisse in an emergency deal in early 2023 that was engineered by the government as the smaller bank was careening toward failure. UBS Chief Executive Officer Sergio Ermotti and Chairman Colm Kelleher have since expressed a sense of frustration that Bern is seeking to impose substantially higher capital requirements on the company.
In the run-up to the parliamentary vote, UBS had thrown its weight behind another proposal for foreign units backing, which would have allowed it to use a form of junior debt known as AT1 bonds to meet some of the new capital requirements. The upper house had to pick between the government’s plan for 100% CET1 backing, the 90% initiative and the AT1 alternative.
It’s “extremely important to draw the right conclusions from the Credit Suisse crisis,” SNB President Martin Schlegel said Thursday. “The proposed measures are important and they really address some regulatory weaknesses that we identified in the Credit Suisse crisis.”
Keller-Sutter has said her plan is necessary to ensure that UBS can dispose of its businesses abroad during a crisis without causing capital depletion at home.
The SNB on Thursday also dialed down its threat of intervention to weaken the franc and raised inflation forecasts while keeping interest rates unchanged.
Keeping the rate at the world’s lowest level doesn’t pose a significant threat to Swiss banks, SNB officials said. Bank profitability has increased compared to last year, when the benchmark was cut to zero, Vice President Martin said.
Low interest rates can be “a challenge,” especially for banks “focused on the domestic market,” Martin said. But “it looks like they’re weathering this challenge well.”
–With assistance from Craig Stirling.
(Adds more comments in final paragraphs.)
©2026 Bloomberg L.P.
