UBS chairman Colm Kelleher has engaged in private discussions with United States Treasury Secretary Scott Bessent about potentially moving the Swiss banking giant's headquarters to the United States. These confidential talks occurred as UBS explores contingency plans to leave Switzerland if the government proceeds with proposed capital rules that would require the bank to hold an additional $26 billion in capital.
Pressure Tactics Over Capital Requirements
The discussions between Kelleher and Bessent took place in recent months, with the Trump administration reportedly receptive to welcoming one of Switzerland's most valuable financial institutions. According to three sources familiar with the conversations, the talks explored what a potential relocation to the United States would entail for the global bank.
These private discussions form part of a broader pressure campaign by Kelleher to influence the Swiss government regarding the proposed capital requirements. UBS has described the $26 billion additional capital requirement as "extreme" and disproportionate, arguing that the rules go beyond what global competitors face and would significantly reduce its international competitiveness.
Swiss Banking Stability Concerns
The Swiss government maintains that stricter capital rules are necessary to strengthen the country's banking system and prevent another crisis similar to the Credit Suisse collapse in 2023. The government-orchestrated rescue saw UBS acquire its crosstown rival, highlighting systemic risks within the Swiss banking sector.
The uncertainty surrounding the proposed regulatory changes has already impacted UBS's market performance, weighing on the bank's share price. Despite extensive public and private lobbying efforts by UBS management, the campaign has yielded limited results in modifying the government's position.
Fiduciary Duty Versus National Loyalty
UBS executives have expressed their preference to keep the bank's headquarters in Switzerland, but only if they can convince parliament to reduce the proposed regulatory impact. However, people familiar with their thinking indicate that UBS leadership believes they have a fiduciary duty to examine all potential options, including relocation if the capital proposals remain unchanged.
The bank stated: "As we have said repeatedly, we want to continue to operate successfully as a global bank out of Switzerland." This position reflects the delicate balance between maintaining their Swiss heritage and protecting shareholder interests.
Activist investor Cevian Capital, which holds a substantial stake in UBS, reinforced the relocation threat in September, stating that the proposed Swiss capital changes would make it "not viable" to operate a large international bank from the country. The investor group added that UBS would have "no other realistic option" but to leave Switzerland if the proposals weren't watered down.
Regulatory Reception in the United States
While the Trump administration has shown openness to attracting European financial institutions, US regulators historically have been cautious about large banks redomiciling in the country. This wariness stems from public anger over taxpayer-funded bailouts during the financial crisis era.
The potential relocation discussions occur against contrasting regulatory backdrops: Switzerland moving toward stricter banking oversight while the United States pursues deregulation across various economic sectors to stimulate growth and encourage business expansion.
Some industry observers view the relocation threat as primarily a negotiating tactic that's unlikely to materialize in practice. However, the involvement of Europe's largest dedicated activist investor lends credibility to the possibility that UBS could seriously consider moving its headquarters if the capital requirements aren't modified.
