Switzerland’s central bank has backed the government’s push for tougher capital requirements for UBS, saying the country’s biggest lender already holds enough capital to comply with the proposed rules aimed at preventing another banking crisis like the collapse of Credit Suisse in 2023.
The assessment from the Swiss National Bank (SNB) comes boldly as it challenges UBS’s repeated argument that the government’s proposals are excessive and would damage both its competitiveness and Switzerland’s position as a global financial center.
The comments also strengthen the government’s hand as it seeks to overhaul banking regulations following the emergency rescue of Credit Suisse, which forced UBS to acquire its long-time rival in a state-backed deal worth about 3 billion Swiss francs ($3.4 billion) in March 2023.
Speaking to reporters in Bern on Thursday, SNB Vice Chairman Antoine Martin defended the government’s proposal requiring UBS to fully capitalize its foreign subsidiaries, describing the measures as appropriate given the bank’s size and systemic importance.
“It is proportionate,” Martin said, referring to the government’s capital proposal. “It would put UBS in line with international peers with respect to capital requirements.”
Government Wants UBS To Add $20 Billion In Top-Quality Capital
Following Credit Suisse’s collapse, Swiss authorities launched one of the country’s biggest regulatory overhauls in decades to reduce the risk of taxpayers once again being forced to rescue a globally systemic bank. At the center of the reform package is a proposal requiring UBS to fully capitalize its overseas subsidiaries rather than relying heavily on parent-company guarantees.
The Swiss government estimates that implementing the proposals would require UBS to hold approximately $20 billion in additional Common Equity Tier 1 (CET1) capital, the highest-quality capital banks maintain to absorb losses during periods of financial stress. CET1 capital consists mainly of ordinary shares and retained earnings and is regarded by regulators as the strongest buffer protecting banks against financial shocks.
UBS has consistently opposed the proposal, arguing that the additional requirements would place it at a competitive disadvantage compared with international rivals and reduce its ability to compete globally.
The central bank, however, concluded that UBS is already in a much stronger capital position than the lender has suggested. In its 2026 Financial Stability Report, the SNB said UBS’s eligible CET1 capital already exceeds the fully implemented capital requirements under the current regulatory framework, which are scheduled to apply from 2030, by approximately $13 billion.
The report also noted that UBS held an additional $9 billion in available reserves at the end of 2025.
“According to the pro forma calculations of the authorities and including reserves, UBS already has sufficient capital to meet the proposed requirements,” the SNB said.
The finding suggests that, when existing capital surpluses and reserves are taken into account, UBS would not need to undertake a large emergency capital raising to comply with the government’s proposed rules.
The SNB also emphasized that the government intends to introduce the tougher capital rules gradually rather than immediately.
Authorities have proposed a seven-year transition period, giving UBS ample time to adjust its capital structure while continuing normal business operations.
“Taking into account this transition period and the bank’s expected profits, UBS can be expected to be able to comply with the proposed capital measures, while continuing to distribute profits to its shareholders,” the central bank said.
That assessment is likely to reassure investors concerned that tougher regulation could threaten UBS’s dividend policy or share buyback programme.
Reforms Aim To Prevent Another Credit Suisse Crisis
The proposed reforms stem directly from the collapse of Credit Suisse, whose rapid loss of customer confidence culminated in an emergency government-brokered takeover by UBS.
The rescue remains one of the most significant banking failures since the 2008 global financial crisis and left Switzerland with a single globally systemic bank whose balance sheet now exceeds the country’s annual economic output. The disappearance of Credit Suisse intensified calls for stricter oversight, with policymakers arguing that UBS’s increased size and systemic importance warrant stronger capital safeguards.
Swiss authorities have sought to ensure that any future banking crisis can be managed without requiring taxpayer-funded support.
Beyond UBS, the SNB said Switzerland’s banking sector remains well positioned to withstand an increasingly uncertain global economic environment.
The central bank acknowledged that conditions have become more challenging since its 2025 Financial Stability Report, citing the conflict in the Middle East, persistent trade tensions, and broader political and economic uncertainty.
Nevertheless, it concluded that the country’s banks remain financially resilient.
“The Swiss banking sector is well positioned to withstand the current challenging macroeconomic and financial environment,” the SNB said.
The assessment comes as regulators worldwide continue strengthening oversight of major financial institutions amid concerns over geopolitical risks, elevated interest rates and slowing global economic growth. Thus, Switzerland presses ahead with reforms designed to make its banking system more resilient following one of the country’s biggest financial upheavals in modern history.
