Swiss lawmakers gather to discuss law that will shape UBS future

A GROUP of 13 Swiss lawmakers will meet in Bern on Monday (May 4) to kickstart the legislative process that will shape the future of UBS Group.

The closed-door hearing of the Upper House’s Economic Affairs and Taxation Committee, which begins at 10.15 am local time, will help set the terms of the debate in the parliamentary chamber that will vote on the bill first, potentially as early as June.

Lawmakers will decide whether to recommend that their colleagues support or reject the proposal, and may also suggest amendments. The bill could impose roughly US$20 billion in additional capital requirements on UBS’s Swiss unit, according to the bank’s estimate in April.

Early signals from the committee will influence what is likely to be months of intense lobbying. The process is expected to run at least into next year – it also needs to go to the Lower House – but with both the government’s credibility and UBS’s business model at stake, manoeuvring is already underway on both sides.

The dispute stems from UBS’s Bern-brokered rescue of Credit Suisse in 2023. The bank’s increased size has raised concerns that Switzerland may be unable to bail it out in a future crisis, prompting the proposed reforms.

A senior financial regulator, speaking on condition of anonymity because the process is ongoing, said UBS lobbyists are highly active in Bern. Finance Minister Karin Keller-Sutter, the driving force behind the reform, has warned just last week that some lawmakers may hesitate to speak openly out of concern that political donations from the bank could dry up.

There’s no evidence of that and a person close to Keller-Sutter said that she does not believe parliamentary independence is compromised, though the remarks have reinforced the government’s broader narrative that UBS wields outsized influence and is thriving, a view reinforced by the bank’s powerhouse results last week.

At those results, CEO Sergio Ermotti said: “We feel pretty strong about the quality of our arguments and the facts. And we do not need to threaten anybody about doing anything because we have too much respect for the Parliament.”

Party donations

Switzerland does not have state-backed party financing, making private donations, including from UBS and other major companies and interest groups, an important source of funding for political parties. However, the sums involved are small compared with those typically seen in the US.

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UBS disclosed that it donated 1.2 million Swiss francs (S$2 million) to Swiss political parties in both 2024 and 2025. Public filings show the funds went to four centre and right-leaning parties: the Swiss People’s Party, the centrist Die Mitte, the free-market Liberals and the Green Liberals. Together, these parties reported total income of 13.2 million francs in 2024.

Lawmakers are expected to be more open to compromise than the government. UBS may find some support among the 13 committee members, all but two of whom belong to centre-right parties, as it seeks to dilute the proposal for full capital backing of its foreign units.

One lawmaker said a compromise floated in December, allowing UBS to partially back its units with so-called AT1 capital, could be revisited.

A bruising battle lies ahead. Swiss lobby groups, from banking to pharma and watchmaking, sent a letter to all lawmakers after the government laid out its plans that said the reform “will place a burden on the entire economy”.

Keller-Sutter struck a different note.

“The Federal Council stood up to its responsibility – now it’s up to parliament,” she told Blick newspaper. “Ultimately, the question is whose interests will prevail: those of taxpayers or those of UBS.” BLOOMBERG