Swiss lawmakers rejected a compromise to water down new capital requirements for UBS, backing a plan requiring the bank to cover 90 per cent of its foreign subsidiaries' value with common equity tier one capital. The upper house of parliament's decision aligns more closely with the government's original plan for full backing, which would have increased capital requirements by about $20bn, rather than a committee proposal allowing cheaper AT1 debt to cover half the burden.

The 90 per cent plan now moves to the lower house, with a final decision unlikely before next year. UBS chief executive Sergio Ermotti called the requirement unacceptable, while finance minister Karin Keller-Sutter defended the reforms, arguing they protect taxpayers rather than shareholders.

The reforms follow the collapse of Credit Suisse, acquired by UBS in 2023. Analyst Andrew Coombs at Citigroup estimated the plan would require UBS to raise roughly $17bn in additional capital, calling it manageable but raising questions on international competitiveness.