Switzerland’s largest bank is about to find out how expensive it is to be the last one standing. UBS Group faces a pivotal week as Swiss lawmakers prepare to vote on capital reform proposals that could force the bank to raise between $20 billion and $26 billion in additional capital.
What’s on the table
The Swiss Federal Council submitted its final proposals on April 22, 2026, targeting amendments to both the Banking Act and Capital Adequacy Ordinance. The core requirement would force UBS to fully capitalize its foreign subsidiaries with Common Equity Tier 1 capital, the highest-quality form of bank capital, consisting of retained earnings and common shares. Requiring full CET1 coverage for foreign units means UBS would need to deduct its foreign subsidiary investments from this capital buffer.
The government’s proposal includes a phased implementation starting at 65%, stretched over seven years. Parliamentary discussions have floated several compromise routes. One option would allow up to 50% of the CET1 requirement to be met with Additional Tier 1 instruments instead. AT1 bonds are cheaper for banks to issue but riskier for investors, as Credit Suisse’s AT1 holders learned when their $17 billion in bonds got wiped out during the 2023 rescue. Another compromise would reduce the CET1 requirements for foreign units to between 70% and 80% of the full amount.
