UBS: Switzerland's Proposed 90% CET1 Capital Backing Would 'Significantly' Damage Competitiveness

12:23 PM EDT, 09/21/2026 (MT Newswires) -- UBS Group (UBSG.SW) said the Swiss government's plan to require the banking group to back its foreign subsidiaries with 90% common equity Tier 1 capital is not a compromise and would "significantly" damage its competitiveness. "The proposal for 90% CET1 backing is very close to the Federal Council's proposal (100% CET1) and would result in UBS, including the already adopted Capital Adequacy Ordinance (CAO) adjustments, having to hold around USD 18 billion more CET1 capital unproductively - with correspondingly high recurring costs," according to the bank's additional position paper published Monday. The group also noted that the proposition of 90% or 100% CET1 capital backing does not adequately protect Swiss taxpayers as both proposals assume an "unrealistic" scenario that all foreign units would be written off simultaneously and almost completely in the event of a crisis. UBS added that the 50/50 majority proposal of the Economic Affairs and Taxation Committee of the Council of States, or WAK-S, protects taxpayers "just as effectively as the Federal Council's proposal because it triggers stabilizing measures significantly earlier while being more cost-efficient." However, this recommendation would still lead to high costs for the bank. The paper comes ahead of the Swiss parliament's upper house's vote on new capital requirements for UBS, which is set to take place Wednesday.