Zurich, Switzerland – November 14, 2025 – A second Swiss parliamentary committee has called on the government to ease certain capital requirements for UBS Group AG (UBSG.S), echoing concerns raised last week and intensifying pressure on regulators to avoid disproportionately burdening the country’s largest bank.

The upper chamber’s economic affairs and taxation committee issued a formal letter emphasizing that Switzerland should align its banking rules with international standards and practices in other major financial centers. The committee specifically cautioned against excessive capital requirements for software and deferred tax assets, which are under consideration as part of a broader regulatory plan.

Background: UBS Capital Rule Proposals

In June, the Swiss government proposed measures to strengthen UBS and reduce systemic risk, aiming to prevent another crisis akin to the Credit Suisse collapse. Under the plan, UBS could be required to hold an additional $26 billion in core capital. Part of this proposal includes excluding software and deferred tax assets from core capital, a rule projected to increase the bank’s capital needs by around $9 billion.

UBS has strongly opposed the exclusion, arguing that it would weaken the bank’s capital position without sufficient justification and could harm the broader Swiss financial industry. The rule could be implemented directly by the government via ordinance measures as soon as 2027, without requiring parliamentary approval.

Parliamentary Pushback

The committee’s intervention underscores ongoing concerns that Switzerland’s banking regulations could be more stringent than those applied to competitors abroad. “Care should be taken not to exceed international standards and common practice in competing financial centers—both in the particulars and as a whole,” the letter stated, signaling lawmakers’ desire for proportionality in regulatory measures.

This is the second parliamentary body to raise such concerns, following a similar appeal from the lower chamber’s counterpart committee. Both committees stress that overly strict rules could undermine UBS’s competitive position, affect its lending capacity, and potentially weaken Switzerland’s broader financial sector.

Implications for UBS and the Swiss Financial System

If implemented without adjustments, the proposed rules could significantly increase UBS’s capital burden, impacting profitability and risk-taking ability. Analysts say this could affect the bank’s operations in both domestic and international markets, with potential ripple effects for Switzerland’s banking sector, which relies heavily on UBS as a cornerstone institution.

However, it remains uncertain whether the Swiss government will revise its proposed rules in response to parliamentary appeals. Observers are watching closely, as the balance between maintaining financial stability and preserving competitive neutrality is a key concern for regulators.

Outlook

The debate highlights the tension between risk mitigation and financial competitiveness in Swiss banking policy. Lawmakers are calling for rules that protect the system without placing UBS at a disadvantage compared to global peers, while the government weighs the need to strengthen the country’s banking framework.

The outcome will set a precedent for future banking regulations in Switzerland, potentially influencing capital requirements and risk management practices for major banks across the country.