A group of Swiss lawmakers is urging that draft banking legislation affecting UBS Group AG be returned to the Federal Council for additional review before the upper house votes on the measure on Thursday.
The parliamentary motion comes as the Senate prepares to consider a compromise reached last month on how to apply tighter rules to Switzerland's sole remaining global bank following the collapse of Credit Suisse in 2023 and its subsequent takeover by UBS.
Under the Federal Council's initial package of reforms, the government had proposed that UBS fully back its foreign units with Common Equity Tier 1 capital. The government estimated that its full set of proposals would require UBS to hold an additional $20 billion in CET1 capital.
UBS has publicly criticized that aspect of the plan as excessive, arguing that a requirement for complete CET1 backing of overseas operations would put the bank at a disadvantage compared with international peers.
Last month, a committee in the upper house approved a compromise to the draft legislation. That agreement would allow UBS to count $13 billion of Additional Tier 1 capital toward the capital backing of its foreign units, reducing the amount of fresh CET1 the bank would need to raise or hold.
On Monday, federal lawmaker Andrea Caroni, who represents the centre-right Liberals party, tabled a motion requesting that parliament send the banking overhaul bill back to the Federal Council. A group of lawmakers is supporting that move, seeking further consideration of the draft ahead of Thursday’s vote in the upper chamber.
The coming vote will decide whether the compromise stands as the parliamentary position or whether the measure is returned to the executive branch for possible revision. Details beyond the motions and the committee-approved compromise have not been advanced publicly in the materials before the upper house.
Context for markets and stakeholders
The dispute centers on the capital treatment of UBS's foreign subsidiaries and the balance between CET1 and Additional Tier 1 instruments. The question will affect regulatory capital requirements and the capital mix the bank must maintain, and it has drawn attention from lawmakers concerned about competitive positioning and financial stability.