ZURICH, 28 September 2025 — Switzerland may need to strike a compromise on proposed capital requirements for UBS Group AG, suggests Thomas Aeschi, a senior figure in the Swiss People’s Party (SVP). Speaking on Swiss National TV, Aeschi cautioned that overly rigid rules could push UBS into seeking greener pastures abroad, thereby undermining Switzerland’s standing in global finance.
Aeschi cautioned against the possibility of an American bank acquiring UBS cheaply under a strained regulatory regime. “It would also be very dangerous if a major American bank were able to buy UBS on the cheap. Then UBS would merely be a subsidiary of a major American bank,” he said, highlighting that Switzerland must preserve UBS’s independence.
Regulatory Pressure & Proposed Capital Reforms
The backdrop to this debate is a sweeping draft of banking reforms that would require UBS to fully capitalise its foreign subsidiaries—an initiative intended to reinforce the resilience of Swiss financial institutions following the rescue and absorption of Credit Suisse in 2023.
Under the government’s draft proposal, the stricter capital requirements would be phased in over seven years, giving UBS time to adjust. The proposal also calls for higher common equity-tier-1 (CET1) backing for its overseas operations, a move that UBS and some political factions contend may place it at a disadvantage relative to global peers.
UBS, for its part, has flagged concerns that these reforms, especially if frontloaded or too aggressive, risk weakening its competitiveness and triggering deleterious capital flight.
Political Dynamics & Market Consequences
Aeschi’s remarks come as key stakeholders in Swiss politics and the financial sector negotiate the tension between stability and competitiveness. The SVP, known for its protectionist leanings, is pushing for more flexible implementation and opposing capital regime overreach.
For markets, the situation presents both uncertainty and opportunity. If Switzerland softens the proposed rules, it may preserve UBS’s relative strength, limit capital strains, and reassure investors about Switzerland’s ability to maintain world-class financial institutions. On the other hand, a perceived capitulation may wear on global confidence in Swiss regulatory credibility.
At the same time, should UBS feel unable to comply under fair conditions, the discussion of relocating parts of its business—especially overseas operations—has re-entered public discourse. This possibility has been mooted in previous commentary, particularly from activist investors and banking circles.
