It's getting closer with great strides The Swiss government's crackdown on banks and in particular on ubs. According to the rumors published by Bloomberg, On June 6, the Swiss government will present a bill containing much more stringent rules on capital requirements. A proposal that aims to safeguard the financial system and increase the solidity of banking institutions, but above all to avoid the occurrence of "another Credit Suisse case”, which plummeted after a series of scandals. And the bank that acquired it could pay the highest price for these new rules. Namely UBS, which would be forced to make a strong increase in its capital requirements and which today, after the publication of the news, is recording heavy losses on the Zurich Stock Exchange. It is no coincidence that for months the banking giant led by Sergio Ermotti is fighting the government's proposal, arguing that forcing the bank to hold more capital would harm its competitiveness against foreign rivals.
UBS: 25 billion in additional capital to comply with new rules
Citing two sources close to the dossier, Bloomberg revealed that, under the provisions of the proposed law that the Swiss government will propose to Parliament on June 6, UBS could be forced to maintain up to $25 billion in additional capital and to strengthen its loss-absorbing capacity, covering losses of up to 100% of the capital of its foreign subsidiaries.
The issue of capital support in foreign subsidiaries “arises from the corporate structure of UBS (and previously also of Credit Suisse), in which many of its foreign units are still part of a central ‘parent’ entity, which is located below the holding company,” the news agency explains. This means that these subsidiaries cannot easily be isolated or sold in times of turbulence without sinking the capital of the parent bank. Therefore, the regulators – Finma and the Swiss National Bank – would like to force UBS to offset the entire capital held in them with the capital held at the parent bank, compared to the current share of 60%.
The law could come into force in 2029, but it's not final yet, so the Federal Council can ask for changes. In the meantime, the bank has four years to put pressure on legislators, trying to water down the measures contained in the bill. This could therefore only be the first of a war that promises to be very long.
UBS's battle against the government
After theCredit Suisse Acquisition-Rescue in 2023, making it the only systemically important Swiss bank globally, UBS has faced mounting capital pressure. The Swiss government and regulators have repeatedly said they want to tighten rules to safeguard the country's financial system, but the proposals have angered the bank.
For months, UBS has been trying to prevent the government's intentions from becoming reality, even going so far as to threaten to leave Switzerland in case the new measures come into force.
On Monday the bank's CEO, Sergio Ermotti, said that stricter regulation in the Swiss banking sector would bewould avoir its competitors, warning of the risks of imposing overly burdensome rules on the country's largest bank.
UBS down on the stock market
The bank's shares immediately reacted to the rumours. On the Zurich Stock Exchange, the UBS shares down 1,89% at 27,48 Swiss francs, after having touched a low of 27,04 francs. In 2025, UBS shares have underperformed the sector, penalised by uncertainty on the capital issue, and have recorded a drop of more than 4% in the year, against a 30% rise in the broader banking index.
