Switzerland’s upper house of parliament voted on Wednesday in favour of capital rules that would require UBS to back its foreign subsidiaries with 90% Common Equity Tier 1 capital, dealing a setback to the bank after it lobbied against the proposal.
The measures were drawn up following the 2023 collapse of Credit Suisse and UBS’s emergency takeover of the lender. The Swiss government had proposed 100% CET1 backing for foreign subsidiaries, but the upper house narrowly rejected that option before supporting the 90% proposal.
UBS CEO Sergio Ermotti said a day earlier that the 90% option was not a meaningful compromise from the bank’s perspective and could weaken its competitive position. UBS has supported a more moderate alternative that would allow a 50-50 mix of CET1 and Additional Tier 1 capital.
The vote does not make the rules final law. The bill now moves to the lower house of parliament, and a final decision is expected no earlier than the end of 2026 and may not come until 2027.