Swiss Upper House Backs Tougher Capital Rules for UBS

Switzerland's upper house of parliament has voted to impose stricter capital requirements on UBS, defying appeals from the bank and major business groups to soften new rules drawn up after the 2023 collapse of Credit Suisse.

The decision on Wednesday requires UBS, whose balance sheet is larger than the entire Swiss economy, to back its foreign subsidiaries with 90% Common Equity Tier 1 (CET1) capital. The measure went further than many political analysts had anticipated and replaced a more moderate compromise passed in late August that would have allowed a 50% CET1 and 50% Additional Tier 1 (AT1) split.

Support for the tougher stance was broad. Lawmakers from centre, centre-right and right-wing parties joined left-wing members in backing the 90% CET1 plan. Centre party lawmaker Pirmin Bischof said the failure of Credit Suisse made it essential for Switzerland to ensure such a crisis could never recur.

"People are thoroughly fed up. It wasn't a vote of conviction, it was about fear of their own voters," said Cedric Wermuth, co-leader of the Social Democrats, adding that after two major banking crises in two decades, parliament could not ignore public demand for stricter rules.

A poll published in June found 79% of respondents clearly or somewhat supported tougher capital requirements, even if it meant UBS paying lower dividends or accepting less growth. Only 9% opposed the idea. A separate study by the Swiss Bankers Association showed positive views of banks had fallen to 53% in 2025 from 75% in 2021.

Jakob Tanner, a history professor at the University of Zurich, attributed some of the scepticism to the billions in bonuses Credit Suisse paid between 2010 and 2022 while accumulating the losses that eventually brought it down.

The vote followed a lengthy consultation in which Swiss cantons and business groups urged the government to keep capital requirements aligned with other major financial centres, warning about Switzerland's competitiveness. The Swiss National Bank and regulator FINMA had supported Finance Minister Karin Keller-Sutter's original plan for 100% CET1 backing, up from the current 60%.

UBS, which acquired Credit Suisse in a state-brokered rescue, declined to comment. After the vote, it said the decision disregarded serious concerns raised by business representatives, employee associations and most cantons. During the debate, UBS chairman Colm Kelleher had warned the bank would have to consider its future in Switzerland if the rules were too harsh, while CEO Sergio Ermotti condemned the 90% CET1 option as excessive and said regulators were partly to blame for Credit Suisse's demise.

Public relations consultant Klaus Stoehlker said the UBS campaign appeared to have alienated lawmakers and authorities responding to public concerns, and that Switzerland now risked being left with a weaker bank and an accelerated decline in its financial sector.

The lower house must still debate the capital plan, which many analysts view as a bigger hurdle for UBS.