Swiss Lawmakers Propose Handing UBS Decision to Government

(Bloomberg) — A number of lawmakers in the Swiss upper house want to let the government rule on new capital requirements for UBS Group AG instead of deciding the issue in parliament.

Council of States member Andrea Caroni of the center-right FDP has submitted a motion to send the bill back to the Federal Council, according to a parliament spokesperson. Broadcaster SRF reported the move earlier.

If adopted by lawmakers in a session to begin on Thursday, the government could set new rules without needing sign-off from lawmakers, increasing the chances of regulation reforms becoming law which UBS has fought strongly against for the past two years.

The executive is pushing for UBS to completely back its foreign units with capital at home. The bank has called the measure “extreme” and said that it would make it uncompetitive.

Getting a majority for handing back the decision will however be “challenging” in the upper house, Caroni told Bloomberg, but added that lawmakers are “independent in making up their minds.”

Caroni is a member of an upper house committee which recently presented a proposal to water down the government’s measures.

“Experts from the federal administration and the Swiss National Bank have outlined all the ways in which the committee’s proposal falls short.,” he said in an interview. “I am convinced that the Federal Council is the better body to address this technical issue of UBS’s capital requirements. This way, we will quickly arrive at a clear, legally sound solution.”

Switzerland has been working to reform its financial regulation since the collapse of Credit Suisse in 2023.

SRF reported that the FDP group in the upper house, the second-largest in the chamber, decided to back it and also some centrist members signaled support. The Green Liberals voiced opposition.

Lawmakers will decide how to proceed on Thursday, when the upper house is scheduled to debate the new rules for UBS.

Thursday’s Agenda

If the chamber decides to send the bill back to the government, it will not work through the proposals on capital backing of foreign subsidiaries and the other elements of the regulatory reform. Instead, the bill would then move to the lower house, which would decide whether to join the call to return it. If that second chamber of parliament doesn’t, the upper house can override it with a second vote.

If upper house lawmakers reject Caroni’s motion on Thursday, the chamber will begin the process of deciding on amendments to the government bill.

Lawmakers will also have the possibility to express their views on the proposals from the committee meeting last week, which suggested watering down the requirements by allowing UBS to use convertible AT1 bonds to meet as much as half of the extra capital need.

Lawmakers will go through the bill article by article and decide whether they back the government’s or the committee’s plan, or one of the other options on the table.

The result of that debate would then be passed to the lower house, likely later this year, for further debate. A final ruling on UBS’s capital requirements isn’t likely until next year at the earliest.

(Updates with confirmation, lawmaker quotes from second paragraph.)

©2026 Bloomberg L.P.