Paul J. Davies, Columnist

UBS’s $26 Billion Capital Hit Isn’t Quite as Bad as It Seems

The Swiss bank’s shares rose following the government’ announcement of its too-big-to-fail rules, probably because investors anticipate the final settlement will be much lower.

June 6, 2025 at 4:53 PM UTC

By Paul J. Davies

Paul J. Davies is a Bloomberg Opinion columnist covering banking and finance. Previously, he was a reporter for the Wall Street Journal and the Financial Times.

UBS will probably be able to negotiate a lower additional capital charge than the $26 billion the Swiss government announced on Friday.
Photographer: Pascal Mora/Bloomberg

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The $26 billion headline capital charge to protect Swiss taxpayers from the risk that UBS Group AG ever fails is worse than anyone expected. And yet UBS’s shares jumped as much as 8% on the news Friday – what gives?

It’s not that investors now know the costs of Switzerland’s beefed-up “too big to fail” rules, which follow Credit Suisse’s 2023 collapse. There’s a lot of uncertainty about the draft law’s final form. Most likely UBS shares have jumped because investors judge that the final bill will be lower – and because they know it’s not due to be paid in full until 2034 at the earliest.