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Bond Market News
UBS and Swiss Government In Negotiations for Easing Capital Rules
September 30, 2025
UBS and the Switzerland government are said to be signaling an openness to compromise on the stricter capital rules proposed after the 2023 Credit Suisse collapse. The capital rules require UBS to hold an additional $24bn which the bank has argued, puts it at a disadvantage versus global rivals. The company said that it has even considered relocating its headquarters. Sources say that the Swiss government may accept rules reducing the burden to around $15bn, though the finance ministry insists no concessions have been made. The parliamentary process, beginning next year, will ultimately decide the outcome, with political parties already pushing for a $10–15bn compromise. Much of the debate focuses on the government’s plan to require UBS to fully capitalize foreign subsidiaries (100% vs. 60% currently). A potential middle ground of 80% could bring the extra burden closer to $15bn. In addition, allowing UBS to use Additional Tier 1 (AT1) debt instead of pure equity could also ease the impact. While UBS remains opposed to what it calls excessive requirements, it expects a “reasonable outcome”. Investors however remain concerned, with one of UBS’ largest shareholders Cevian, warning that despite the softened rules, UBS’s competitiveness could be undermined and called for a relocation if needed.
UBS’ dollar bonds traded stable with its 6.6% Perp at 100.9, yielding 6.38%.
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