# Swiss commission proposes compromise on UBS capital rules

> Live situation record from CLSTR: https://clstr.news/situations/swiss-banking-regulation-debate-regarding-ubs
> Updated: 2026-08-31T04:44:06.000Z. Sources: 14. Developments: 2.

UBS shares previously reached an 18-year high of 44.53 Swiss francs amid discussions regarding stricter capital requirements in Switzerland. The Swiss Federal Council had proposed that UBS significantly increase its capital buffers, potentially requiring an additional 23 billion francs in equity, including a demand for 100 percent capital requirements for foreign subsidiaries.

The Council of States' Economic Affairs Commission (WAK-S) has now proposed a more moderate regulatory compromise. This recommendation suggests that UBS’s foreign subsidiaries be backed by 50 percent Common Equity Tier 1 (CET1) capital and 50 percent AT1 bonds. This diverges from the government’s original ‘Lex UBS’ proposal, which sought higher levels of hard core capital to prevent a repeat of the 2023 Credit Suisse collapse.

UBS CEO Sergio Ermotti has lobbied against the stricter regulations, arguing they would harm global competitiveness and the bank’s ability to provide shareholder dividends. While legal experts have characterized the commission’s proposal as a “political victory for UBS lobbying,” some critics argue the compromise may not sufficiently bolster the financial system’s resilience against future crises. Market reaction to the news has been mixed, with analysts noting that capital uncertainty may be shifting toward a focus on capital returns.

## Claims

- The WAK-S proposed that UBS foreign subsidiaries be backed by 50 percent Common Equity Tier 1 (CET1) capital and 50 percent AT1 bonds. (corroborated by 4 sources)
- The Swiss Federal Council originally proposed that systemically important banks maintain 100 percent CET1 capital for foreign subsidiaries. (corroborated by 4 sources)
- The Federal Council's original proposal would have required UBS to hold approximately 20 to 23 billion Swiss francs in additional capital. (corroborated by 2 sources)
- UBS CEO Sergio Ermotti opposed the stricter capital requirements, citing concerns over reduced competitiveness and lower shareholder returns. (single source)
- The analysis firm Jefferies maintained a 'Buy' rating for UBS with a price target of 60 francs following the commission's decision. (single source)
- Law professor Peter V. Kunz characterized the commission's decision as a political victory for UBS lobbying rather than a purely legal or safety-driven one. (single source)

## Timeline

### 2026-08-31: UBS capital rules: Swiss commission proposes moderate regulatory compromise

A Swiss parliamentary commission has proposed a moderate capital requirement for UBS foreign subsidiaries, opting for a 50/50 split of CET1 and AT1 bonds instead of the 100 percent CET1 demanded by the state.

11 sources. https://clstr.news/cluster/ubs-shares-hit-18-year-high-amid-swiss-capital-regulation-debate

### 2026-08-21: UBS and Deutsche Bank raise financial market and asset management forecasts

UBS has raised its S&P 500 year-end target to 8,100, citing economic expansion and AI, while Deutsche Bank increased its price target for St. James’s Place following record funds under management.

3 sources. https://clstr.news/cluster/ubs-and-deutsche-bank-raise-financial-market-and-asset-management-forecasts

---
Cite as: Swiss commission proposes compromise on UBS capital rules. CLSTR, https://clstr.news/situations/swiss-banking-regulation-debate-regarding-ubs