Report: UBS headquarters considers relocating to the United States in protest of Switzerland's regulatory authority's "extreme" capital requirement of $26 billion

Colm Kelleher, Chairman of UBS Group AG, recently discussed privately with U.S. Treasury Secretary Janet Yellen the possibility of relocating the headquarters of this Swiss banking giant to the United States. On November 17, media reports citing three informed sources revealed that Kelleher and Yellen had talks in recent months about specific plans for UBS's relocation to the U.S., with the Trump administration open to accepting one of Switzerland's most important assets. This meeting is part of Kelleher's ongoing efforts to pressure the Swiss government. The new capital requirements proposed by the Swiss government would force UBS to hold an additional $26 billion in capital, which UBS has described as "extreme" and disproportionate. So far, the public and private lobbying efforts by UBS management have yielded little success. New Capital Regulations Trigger a Game of Strategy The Swiss government insists on implementing stricter capital requirements to avoid a repeat of the Credit Suisse collapse. In 2023, UBS acquired its competitor in a government-led rescue operation. UBS argues that the new requirements exceed global industry standards and would weaken its international competitiveness. The bank stated: As we have repeatedly said, we wish to continue operating successfully as a global bank in Switzerland. According to reports citing informed sources, UBS executives hope to keep the headquarters in Switzerland, provided they can persuade the Swiss parliament to ease the proposed impact. However, they believe that if the proposal does not change, they are willing to consider leaving. Cevian Capital, an activist investor holding a significant stake in UBS, stated last September that the proposed capital changes in Switzerland would make it "unfeasible" to operate a large international bank in the country. This largest European specialized activist investment firm added that if the proposal is not weakened, UBS will have "no other realistic choice" but to leave Switzerland. Divergence in Transatlantic Regulation As Switzerland tightens capital rules, the U.S. is pursuing deregulation in various economic sectors to promote growth. The Trump administration has indicated its intention to relax banking regulations, with Yellen citing the growth of private credit as an example, stating that the banking sector is "over-constrained," and advocating for minimizing capital and liquidity rules to free up more lending capacity. U.S. regulators have previously been cautious about large banks relocating to the U.S. due to public outrage over taxpayer-funded bailouts during the financial crisis. However, the Trump administration is more open to the idea of attracting European financial institutions. The Trump administration's moves to relax banking rules have raised concerns among European regulators, who believe that U.S. deregulation will give American banks an advantage over their counterparts across the Atlantic and pose risks to the stability of the global financial system