Swiss lawmakers have privately assured UBS executives they will water down stringent new capital requirements by $22bn, according to sources close to the situation. The government's "too big to fail" reform package, unveiled last year after Credit Suisse's collapse, faces parliamentary debate starting in June, with a final decision possible by April. While a core group of lawmakers pushes for compromise to protect Switzerland's global financial standing, the proposal's impact on UBS's competitiveness remains uncertain.

The reforms include tightening capital rules on UBS's domestic operations, adding $2-3bn to requirements, while the more contentious $20bn foreign capital component could be significantly reduced. Analysts warn even a diluted plan might still leave UBS at a competitive disadvantage internationally, potentially prompting executives to consider relocating. The finance ministry previously rejected a lawmaker compromise proposal, highlighting parliamentary influence limits.

UBS executives, frustrated by regulatory pressure, are pinning hopes on parliament to moderate the rules. The bank's stock, down over 20% this year despite hitting a 17-year high in December on reform hopes, faces continued volatility. The outcome will determine whether Switzerland maintains its position as a global financial hub or becomes more strictly regulated than rivals like the US and UK.