The Swiss parliament is expected to water down proposed credit reforms for UBS, according to Reuters.

The Swiss government intensified efforts to reform its capital requirements in the wake of the collapse of Credit Suisse, which UBS acquired in 2023.

Specifically, the Swiss government has proposed that UBS hold $20 billion in additional cent Common Equity Tier 1 (CET1) capital to prevent the need for a state bailout if UBS were to fail. The ​Swiss National Bank told Reuters that UBS is already capitalised to meet this additional requirement, but UBS has argued that it would affect its competitiveness.

Meetings on 10, 11, and 31 August will see the Economic Affairs and Taxation Committee consider dropping requirements for UBS to fully capitalise its foreign subsidiaries, instead requiring backing of only 50 to 80 per cent CET1 capital.

This could result in UBS only needing to hold an extra $12 billion in capital, or potentially totally eliminate the requirement.

“We certainly don't want to put taxpayers' money at risk for a possible bank bailout, but we also mustn't weaken UBS unnecessarily,” Fabio Regazzi, a lawmaker of the Centre party, told Reuters.

“I'm confident we'll find a compromise,” Regazzi added.

The Financial Times first reported that the Swiss parliament was considering watering down its requirements in March. That month, the paper also reported that some Swiss lawmakers had privately urged UBS to tone down its lobbying efforts over fears they could backfire and lead to a hardening of the requirements.

In June, UBS’s chief executive Sergio Ermotti told Reuters that he expects the Swiss parliament to “focus with cool heads, less ​emotions around what needs to be ⁠done to achieve financial stability, but ​also competitiveness”.

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