UBS Weighs Moving Headquarters Out of Switzerland if Capital Rules Tighten, WSJ Reports

UBS is preparing contingency plans that could include moving its headquarters out of Switzerland if lawmakers tighten its capital requirements, the Wall Street Journal reported Wednesday, Oct. 14, citing people familiar with the matter. UBS declined to comment.

According to the Journal, the options include buying a US financial institution and relocating, merging with a European rival, or selling itself to a US bank. Reuters said it could not immediately verify the report.

No one has announced a decision. People familiar with the planning told Reuters no active merger or acquisition talks are underway.

The rule at the center of the fight

The dispute traces to the 2023 rescue of Credit Suisse, which UBS absorbed. Switzerland is writing tougher "too-big-to-fail" rules so that a bank of UBS's size can absorb its own losses, especially those from abroad.

Under the government's plan, UBS's foreign subsidiaries would have to be backed 100% by Common Equity Tier 1 (CET1) capital. Today the requirement is at least 60%, largely met with CET1. The government plan would force UBS to hold roughly an extra $20 billion in CET1.

On Sept. 23, the upper house, the Council of States, voted for a softer version: 90% CET1, phased in over seven years. UBS says even that would require about $16 billion in additional capital, and still considers the threshold too high.

The government's stated rationale is taxpayer protection. The Swiss state was forced into the Credit Suisse rescue, and the government argues that tighter safeguards are needed given UBS's large international operations.

UBS's counter is that the 100% requirement is excessive and would hurt its international competitiveness.

Pressure from shareholders

On Sept. 30, US investor Artisan Partners urged UBS to leave. It called the planned requirements "punitive" and said Switzerland is "no longer an attractive or desirable location" for the bank. Artisan put the extra common equity at $16 billion.

Cevian Capital, which holds about 1.5% of UBS, has also shifted its stance. In early 2025 it said "Switzerland is good for UBS, and UBS is good for Switzerland." Later that year it said it saw "no other realistic option but to leave," according to an analysis by the bsic.it research outlet.

UBS leadership says it wants to stay

CEO Sergio Ermotti told CNBC last week that staying in Switzerland is good for both the economy and shareholders. Chairman Colm Kelleher warned last month that UBS would have to "carefully consider" its future in Switzerland if the rules become too stringent. He said the preferred outcome is a "Swiss compromise that allows us to stay in Switzerland."

That pairing of public reassurance and a stated willingness to walk is classic bargaining ground. It is also the situation a government should expect when it asks a bank to hold more capital. It is unclear whether UBS is bluffing or planning.

The Financial Times has reported that the British government and UBS discussed a possible move this year, with London named as a potential destination. Reuters, citing people familiar with UBS's thinking, said an internal executive group is examining scenarios, including identifying smaller US banks to buy.

The same people said a theoretical merger with Morgan Stanley has surfaced as one scenario. Kelleher spent much of his career at Morgan Stanley and rose to a senior leadership position there. Neither bank has commented on any such combination, and the scenario is attributed to anonymous sources.

Why a move is not simple

Redomiciling a bank with a balance sheet roughly double the size of the Swiss economy, as the bsic.it analysis describes it, would involve regulatory approvals across several jurisdictions, restructuring of legal entities and disruption for staff and clients. Switzerland also offers UBS an established banking environment and a strong international reputation.

The bsic.it analysis lists other routes that stop short of leaving: shrinking abroad, restructuring legal entities, or using the threat of departure to negotiate a softer rule.

What comes next

A lower-house parliamentary committee is expected to begin debating the proposals later this month. The final shape of the foreign-subsidiary requirement, somewhere between today's 60% and the government's 100%, will determine whether the contingency plans stay on paper. UBS has not said what threshold it could accept.