Self-Help or Self-Sabotage? Activist’s Proposal for UBS to Leave Switzerland Risks Spiking Costs

Core Viewpoint - The Swiss government is proposing to compel UBS to add $26 billion to its reserves, with the Swiss parliament clearing the way for $11 billion of that amount to be imposed directly [1][3]. Group 1: Government Proposals and UBS's Response - UBS is lobbying for a softer stance from policymakers, arguing that the proposed capital requirements would place the bank at a competitive disadvantage [2]. - An activist investor with a 1.4% stake in UBS is suggesting that the bank should consider relocating its headquarters to the US as a bargaining tactic [2][4]. - UBS is pressing the Swiss government to roll back its June proposals, which would require the bank to fully capitalize its foreign subsidiaries [4]. Group 2: Implications of Potential Relocation - The activist investor claims that the new capital proposals would make it "not viable" for UBS to operate a global investment bank in Switzerland, leading to the suggestion of relocation [4]. - Reports indicate that UBS officials have met with the Trump administration regarding a potential move to the US, but this is viewed as more of a negotiation tactic than a genuine threat [4]. - If UBS were to relocate to the US, its large Swiss business would be treated as a foreign entity, likely facing stricter capital requirements, which could complicate its operations [4].