The Swiss government announced on December 5, 2025 that it will soften a portion of a banking regulation package that could have forced UBS Group AG to add as much as $24 billion in capital. The change targets the “too‑big‑to‑fail” framework that was strengthened after the Credit Suisse collapse.
The proposed softening focuses on the valuation of deferred tax assets and software, which would reduce the capital requirement by about $3 billion—roughly 11 % of the total potential $24 billion. The larger portion, about $21 billion, relates to fully backing UBS’s foreign subsidiaries, a measure that remains pending parliamentary approval.
UBS has spent months lobbying, labeling the demands “extreme.” A finance ministry spokesperson said the decision is not yet complete, and the bank is monitoring the legislative process closely. The potential relief would allow UBS to maintain financial flexibility, freeing capital that could otherwise be returned to shareholders or invested in growth initiatives.
The regulatory shift follows the Credit Suisse collapse in March 2023, which prompted a review of Switzerland’s TBTF regime. The reforms aim to strengthen capital quality and reduce risk to the state, while balancing domestic stability with international competitiveness.
UBS’s CET1 ratio stood at 14.4 % as of June 30 2025, indicating a solid capital base. A reduction of up to $24 billion would improve the bank’s return‑on‑capital metrics and could enhance shareholder value, but the final outcome depends on parliamentary approval of the foreign subsidiary back‑up rule.
Management remains cautious, noting that while the softening of deferred tax asset rules is a welcome relief, the larger foreign subsidiary requirement still poses a significant headwind. The bank is monitoring the legislative process closely.
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