The Swiss finance ministry has carried out an internal review of how UBS might fare if it were to move its headquarters abroad in response to proposed Swiss capital rules, concluding that relocating would be legally complex and potentially as costly as the measures the government is proposing.
The assessment, prepared by ministry officials, examined how UBS would be treated under US and UK legal and regulatory frameworks. It concluded that each jurisdiction presents significant capital- and structure-related constraints that could impose costs on the bank comparable to the approximately $18 billion in additional Common Equity Tier 1 capital that the Swiss proposals aim to require.
Swiss authorities are drafting the new rules in response to the 2023 collapse of Credit Suisse. The measures under consideration would force UBS to hold more CET1 capital than it does today, with one proposal calling for full backing of foreign subsidiaries by the parent with CET1 capital. The government said the relevant authorities view the Federal Council’s proposed measure as effective, targeted, proportionate and, in particular, manageable for UBS.
UBS declined to engage with the specifics of the analysis, responding only that it does not comment on speculation or views expressed on such matters. Still, members of UBS senior management have publicly warned that the planned rules could impair the bank’s competitiveness. The chairman of UBS has suggested the bank could contemplate its future in Switzerland if the requirements prove too onerous, and CEO Sergio Ermotti has said the bank is assessing its ability to compete from Switzerland while noting there is no rush to act because any new rules will take time to be implemented.
UBS remains Switzerland’s last global bank. The group’s financial statement shows the holding company paid about $1 billion in taxes in 2025. Banks are the largest corporate taxpayers in the city of Zurich, according to official figures. An employee group has cautioned that as many as 12,000 of around 34,000 UBS positions in Switzerland could be at risk if the bank chose to relocate in response to the regulations.
Why a US move would be difficult
The ministry analysis highlights that a move to the United States - often considered a principal option for relocation - would not come without steep obstacles. In the US, large banking groups typically adopt a so-called flat holding structure in which the holding company directly owns the operating units. The assessment noted that US restrictions on double leverage and on so-called clean holdings would effectively mean that a flat holding structure absorbs the same amount of capital as fully capitalising both domestic and foreign units.
Clean holding restrictions in the US are designed to keep the holding company of a major bank relatively free of liabilities that could complicate resolution in a crisis. Double-leverage rules limit the extent to which a parent company can use debt to capitalise subsidiaries. The Swiss document indicates that if US regulators accepted UBS’s existing parent-bank structure after a move, some relief in how subsidiaries’ capital was treated might be possible. But the assessment also stressed that US regulatory requirements could change materially under a change of government, adding an element of policy uncertainty to any relocation calculus.
The ministry’s review did not analyse the option of relocating via a merger, a route UBS is reportedly investigating as part of contingency planning. Nor did it quantify the potential economic consequences for Switzerland if UBS were to leave, leaving unanswered questions about the broader domestic impact.
How the UK option stacks up
The analysis found that Britain applies slightly softer rules toward foreign subsidiaries and can, in some cases, grant specific waivers. Even so, adopting UK rules would not be neutral for UBS’s Swiss business. Under the UK framework, the Swiss operation would likely face a substantially higher risk weighting than it currently carries as a domestic business, and the bank would therefore have to hold additional capital against its Swiss arm.
Overall, the document warned that it is difficult to conduct a rigorous quantitative comparison of the various regulatory regimes and their capital implications for UBS. The ministry’s work highlights many moving parts - legal structure, capital treatment, the potential for waivers, and the risk of future rule changes - that would complicate any straightforward calculation of the cost of relocating.
Political and parliamentary context
Swiss proposals initially sought to require UBS to fully back foreign subsidiaries with CET1 capital. The upper house of parliament recently diluted that stance by approving a proposal for a 90% CET1 capital target instead of 100%. Either threshold is substantially higher than UBS’s current capital requirements.
A lower house committee has begun debating the rules this week and asked the government for clarifications on several points. Detailed discussions on the reforms are scheduled to resume in November, ahead of a potential lower house vote in December.
Bottom line
The finance ministry’s internal assessment underlines the depth of the legal and structural challenges that would face UBS were it to consider relocating to either the United States or the United Kingdom to avoid stricter Swiss capital rules. While relocation could, in some respects, reduce the direct impact of certain Swiss proposals, the assessment concludes that both jurisdictions impose constraints - and potential capital demands - that would make moving both costly and legally complicated. Swiss officials maintain the proposed measures are manageable for UBS, and parliamentary processes on the matter continue.