Finance
Some UBS capital rules should be softened, lawmakers tell Swiss government
Published by Global Banking & Finance Review®
Posted on November 4, 2025
2 min readLast updated: January 21, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on November 4, 2025
2 min readLast updated: January 21, 2026
Swiss lawmakers propose easing UBS capital rules to ensure competitiveness. The focus is on excluding software and deferred tax assets from core capital.
ZURICH (Reuters) -Capital requirements for UBS should not exceed those in other major financial centres, a Swiss parliamentary committee said on Tuesday, increasing pressure on the government to ease part of proposed rules that do not require lawmakers' approval.
The remarks by the lower chamber's influential economic affairs and taxation committee follow parliamentary hearings with top UBS executives, leaders of the Swiss National Bank and the head of financial market regulator FINMA.
"The tightening of regulations must ensure a competitive cost-benefit ratio for the Swiss capital regime," the committee said in a letter to the government.
Under a plan to make Switzerland's remaining big bank less risky and avoid another Credit Suisse-style meltdown, the government in June laid out plans that could force UBS to hold $26 billion more in core capital - a move the bank has called extreme and damaging.
DEDUCTING SOFTWARE AND DEFERRED TAX ASSETS
The committee's intervention focuses on a rule that will prohibit counting software and deferred tax assets as core capital, a change that the government estimates could increase UBS's capital requirements by about $9 billion.
That rule is one the government can mandate directly without the say of parliament, via so-called ordinance measures, currently set to come into force in 2027.
It is unclear whether the government will heed the call.
UBS opposes the exclusion, arguing it would destroy capital without justification, thereby weakening the bank and the Swiss financial industry.
Several Swiss cantons and business associations have raised concerns about Switzerland's competitiveness in a public consultation that ended in September.
Reuters reported in September that Switzerland and UBS are, in private, signalling a willingness to compromise on capital rules, potentially paving the way for lower requirements acceptable to the government and the bank.
(Reporting by Ariane LuthiEditing by Tommy Reggiori Wilkes and David Goodman)
Capital requirements are regulations that require banks to hold a certain amount of capital reserves to cover potential losses, ensuring financial stability and protecting depositors.
Financial regulation refers to the laws and rules that govern financial institutions and markets to maintain stability, protect consumers, and prevent financial crimes.
The Swiss National Bank is the central bank of Switzerland, responsible for monetary policy, maintaining price stability, and overseeing the financial system.
Core capital is the capital that banks must hold to absorb losses and is primarily composed of common equity, ensuring the bank's solvency.
A competitive cost-benefit ratio evaluates whether the costs of regulations are justified by the benefits they provide, ensuring that businesses remain competitive.
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