The UBS delegation was high-ranking, meeting with representatives of U.S. President Donald Trump's administration. According to a report in the «New York Post», talks touched on a potential strategic shift in the very market where UBS is seeking a national banking license. Options reportedly included acquiring or merging with a U.S. bank.

UBS declined to comment on the talks - without denying them. That silence alone is enough to raise eyebrows.

UBS Leadership Feels Betrayed

It has become increasingly clear that UBS leadership has begun to seriously explore the possibility of relocating outside Switzerland. This is far more than idle speculation within the board of the combined banking group. «It's two minutes to midnight. The board is currently debating the issue very intensively,» said one insider. 

This development is not surprising. The leadership of Switzerland's last major bank is disillusioned with Swiss politics. Within financial circles, there is even talk that the takeover of Credit Suisse is now regretted.

Broken Promises in the CS Takeover?  

UBS leadership feels betrayed. On the weekend of March 19, 2023—when the takeover of Credit Suisse (CS) by UBS was finalized—Switzerland’s finance minister, Karin Keller-Sutter, is said to have assured UBS's top executives that the bank would not face any disadvantages.

Not even two years later, a package of big-bank regulations is on the table, introducing stricter capital requirements that threaten to suffocate UBS in its international business. Cevian CEO Lars Förberg drew a parallel to the customs dispute: «Unlike, say, the 39 percent U.S. tariffs on Swiss goods, these measures hit UBS as the only bank worldwide. This massively restricts its competitiveness,» he told «NZZamSonntag». 

Reputation Loss, Credit Crunch, and More

The moving boxes are not yet packed. The moving company has not yet been called. But Bern would do well not to ignore the warning signs again - as it did in the Credit Suisse drama.

The reputational damage would be immense: if UBS were to leave, Switzerland's financial center would lose not only its last global bank, but also its place in the banking Champions League. Retail banking would vanish, along with its extensive branch network. Only a wealth management booking center would remain in Switzerland, according to the plans.

The fiscal impact would be severe: the federal government, cantons, and municipalities would lose significant tax revenues - from UBS itself, but also from its highly paid employees.

The economic consequences would be devastating: small and medium-sized enterprises in particular would struggle to access credit. Neither regional banks nor foreign institutions could fill the gap; UBS's Swiss loan book amounts to some 350 billion francs.  

The U.S. would be the laughing third party: It is an open secret: Switzerland's financial center is a thorn in Washington's side. Since the collapse of Lehman Brothers, the U.S. has sought to neutralize Switzerland's banking hub. UBS would be welcomed with open arms in the U.S.

A Banking Crisis  – Caused Politics 

The UBS leadership's talks with Tup administration officials should serve a wake-up call for Bern.

Unless adjustments are made to the capital requirements, Switzerland risks walking straight into the next banking crisis—this time one of its own political making.