Swiss Council of States votes for 90% capital requirement on UBS foreign units

Council vote on foreign subsidiary capital

The Swiss Council of States voted on Wednesday, 23 September 2026, to mandate that systemically important Swiss banks back their foreign subsidiaries with 90% Common Equity Tier 1 capital. The decision in the small chamber was approved with 33 votes in favour to 10 against and two abstentions, according to one count, while another tally recorded 29 votes in favour and 16 against. The measure goes beyond the 50% backing recommended by the preparatory economic commission, which also proposed allowing up to 50% in Additional Tier 1 instruments. However, it falls short of the 100% hard equity requirement advocated by the Federal Council and Finance Minister Karin Keller-Sutter. Existing regulations require banks to hold 45% capital backing for foreign subsidiaries.

Financial impact and capital figures for UBS

The 90% requirement would require UBS to hold approximately $16 billion (13 billion Swiss francs) in additional CET1 capital for its foreign subsidiaries if confirmed by the full parliament. This requirement adds to approximately $2 billion in CET1 capital stemming from ordinance-level measures announced earlier this year, as well as $15 billion already disclosed under existing rules following the acquisition of Credit Suisse. In total, the bank estimates it would need to hold around $33 billion (27 billion Swiss francs) in additional CET1 capital following the takeover. At the same time, earlier ordinance changes are expected to reduce group-level CET1 capital by $4 billion, generating total annual costs of roughly $2.5 billion for UBS. On the Zurich stock exchange, UBS shares gained 1.2% on Wednesday morning following the vote.

Reactions across the banking industry

UBS firmly rejected the decision in an official statement on Wednesday, stating that the outcome is not a compromise and fails to address the root causes of the Credit Suisse collapse. The bank noted that the chamber ignored feedback from economic representatives, employee associations, and cantons during the consultation process, as well as the financial role of UBS shareholders during the Credit Suisse acquisition. Industry associations also criticized the parliamentary move. Roman Studer, chief executive of the Swiss Bankers Association, argued that the policy weakens the national financial sector:

The decision of the Council of States weakens the competitiveness of the Swiss banking centre. Instead of drawing the right lessons from the CS crisis, a massive tightening without proven stability gains is demanded. Switzerland is embarking on a separate path that no other financial centre is taking. There is a risk that services will disappear and we will lose talent and our international leading position.

Stefan Brupbacher, director of manufacturing association Swissmem, also warned that the decision could increase financing costs across the technology industry:

We regret the decision. The tech industry needs banks that offer services on nationally and internationally competitive terms. With the decision of the Council of States, financing costs for companies in the tech industry threaten to rise.

Political debate and next legislative steps

The parliamentary debate caused divisions among centre-right parties, including the Swiss People's Party (SVP) and FDP.The Liberals. SVP member Hannes Germann supported the 50% commission model, while his colleague Jakob Stark backed the 90% proposal. Among FDP members, former party president Thierry Burkart voted for the commission draft, whereas current leader Benjamin Mühlemann supported the 90% rule. University of Bern law professor Peter V. Kunz stated that public statements from UBS chief executive Sergio Ermotti contributed to the parliamentary pushback, while noting that parliament must also establish effective resolution and liquidation mechanisms for failing lenders. The legislative draft now moves to the National Council for review.