UBS is preparing contingency plans that could go as far as moving its headquarters abroad. That is what the Wall Street Journal reported on Wednesday, in a story picked up by the Reuters news agency and then by Fintechnews Switzerland. According to the American daily, these scenarios are being studied in case the Swiss Parliament imposes stricter capital requirements on the bank. The newspaper relies on people familiar with the matter. These are therefore plans reported by the press, not a decision announced by the bank.

What the Wall Street Journal reports

According to the Wall Street Journal, several options are reportedly on the table. UBS could acquire an American financial company and move its headquarters there. The other options mentioned are a merger with a European competitor or a sale to an American banking institution.

This information should be treated with caution. Reuters states that it could not immediately confirm the newspaper’s article, and UBS declined to comment on it. None of these options has therefore been confirmed by the bank, and there is no indication at this stage that a choice has been made. Nor do the sources specify which body within the bank would be working on these scenarios, or on what timetable.

The “too big to fail” framework under discussion

The underlying issue is the revision of the so-called “too big to fail” rules, which target systemically important banks. According to Reuters, Switzerland has been considering tightening these capital requirements since UBS took over Credit Suisse in 2023. The sensitive point concerns the bank’s foreign subsidiaries: the question is to what extent they must be backed by the highest-quality capital.

The sources consulted do not detail the government’s initial draft or its text, and do not provide a link to the official document. Nor do they specify the next steps in the parliamentary timetable. They do, however, make it possible to see where the debate in Parliament stands.

The position of the upper house

In September, the upper house of Parliament backed a version that would require UBS’s foreign subsidiaries to be 90% covered by the highest-quality capital. This is therefore a text voted by one of the two chambers, not a rule already in force. The sources do not say how the other chamber will position itself, nor when the text could come into force.

According to UBS’s estimates, this version could add around 16 billion dollars to the core capital the bank must hold. This amount is the bank’s own estimate, not a figure established by an authority.

UBS’s arguments

The bank has from the outset contested full coverage of its foreign subsidiaries by top-tier capital. It considers such a requirement excessive. In its view, a rule of this kind would put it at a disadvantage against its international competitors, which would not be subject to the same constraints.

It is in this context that the plans reported by the Wall Street Journal should be seen. They can be read as preparation for several possible outcomes of the parliamentary debate. But as long as the bank does not speak out, it remains impossible to say whether these are mere working scenarios, a means of pressure in the political discussion or a seriously considered option.

Key takeaways

At this stage, several elements are established by the sources. First, Switzerland is discussing a tightening of the “too big to fail” rules following the takeover of Credit Suisse by UBS. Second, in September the upper house backed 90% coverage of foreign subsidiaries by the highest-quality capital, which UBS puts at around 16 billion dollars in additional capital. Finally, according to the Wall Street Journal, the bank is preparing contingency plans, including a possible move of its headquarters, information that neither Reuters nor UBS has confirmed.

Sources