Overview
- A Council of States committee advanced the compromise that reduces the CET1 backing for UBS’s foreign subsidiaries to about 70–80% and permits some Additional Tier 1 (AT1) instruments to count toward the requirement, a package sent on for an August 31, 2026 vote.
- Under the compromise, UBS’s extra common‑equity need falls sharply: at an 80% rule the bank would face roughly $15 billion in new CET1 needs and the requirement could shrink to about $400 million if AT1 bonds cover up to half.
- The draft still needs full Council of States approval and a separate review and vote in the lower house, where lawmakers may press for tighter conditions, so final rules are expected by late 2026 or could slip into 2027.
- The push follows UBS’s March 2023 emergency takeover of Credit Suisse and FINMA’s controversial write‑down of about CHF16 billion of Credit Suisse AT1 bonds, facts that shaped lawmakers’ caution about letting AT1 instruments absorb losses.
- Lawmakers attached measures to raise the cost of AT1 use and force trustee actions if UBS’s CET1 ratio falls, outcomes that could protect taxpayers but also raise funding costs for UBS and affect dividends, pay and investor returns.