UBS Faces $33 Billion Capital Bill Amid Swiss National Bank's Regulatory Overhaul

UBS is facing a significant capital bill of approximately $33 billion due to the Swiss National Bank's (SNB) backing of tougher capital requirements. The bank's balance sheet exceeds Switzerland's annual economic output, and its foreign subsidiaries will need to maintain a hard-core capital (CET1) coverage of at least 90%, according to Antoine Martin, vice-chair of the SNB's governing board.

The regulatory overhaul, which is expected to take effect in 2027, will require UBS to set aside $16 billion in additional CET1 capital. Adding other measures and the requirements following the Credit Suisse rescue, the bank's total CET1 need since the takeover swells to an estimated $33 billion.

The political debate surrounding the reform has been intense, with some politicians criticizing UBS' leadership for aggressive lobbying and public warnings that provoked pushback in parliament rather than fostering compromise. Finance Minister Karin Keller-Sutter pushed back, insisting that hard-core capital is the decisive lever in a crisis and that the country cannot absorb a collapse of the major bank.