ZURICH — Switzerland’s top financial official believes UBS will almost certainly keep its headquarters in the country, despite a parliamentary vote that imposes far stricter capital requirements on the banking giant.
Finance Minister Karin Keller-Sutter told CH Media that relocating abroad would cost UBS considerably more than complying with the new rules, while also creating major legal hurdles. Her comments followed a warning from UBS Chairman Colm Kelleher, who suggested last week that the bank might reevaluate its Swiss presence if lawmakers pushed capital demands too far.
Wednesday’s upper house vote dealt a significant setback to UBS. Parliament backed a measure requiring the bank to support its foreign subsidiaries with 90 percent Common Equity Tier 1 capital, rejecting a cheaper alternative UBS had championed that would have split the requirement evenly between CET1 and Additional Tier 1 instruments.
The bank estimates the stricter standard could force it to hold roughly $18 billion in extra capital.
Keller-Sutter acknowledged that UBS “went all out” during the lobbying battle, apparently expecting parliament to side with its position. Meanwhile, she said the Swiss government had already worked out certain compromises with the lender, a characterization UBS publicly disputed earlier in the week.
As a result, the standoff leaves both sides facing an uncertain path forward. Whether UBS accepts the higher capital burden or escalates its relocation threat remains an open question, one that could reshape Switzerland’s financial landscape for years to come.
