The Swiss government has analysed how UBS (UBSG.S) would fare if it relocated abroad to escape stricter new capital rules, underlining how seriously officials are taking the possibility the country's biggest bank could leave.

Reviewed by Reuters, the internal assessment examines what US and British legal systems would mean for UBS, identifying significant costs in each that could match the capital hit of Swiss proposals.

The Zurich-based lender faces costlier regulation under rules Swiss officials are crafting in response to the 2023 collapse of Credit Suisse, which could require UBS to find around $18 billion in additional Common Equity Tier 1 capital.

The finance ministry told Reuters it had examined possible arrangements for UBS to relocate in light of the governing Federal Council's proposed capital measures, including at the request of a parliamentary committee overseeing banking rules.

"The relevant authorities consider the Federal Council's proposed measure to be effective, targeted, proportionate and, in particular, manageable for UBS," said the ministry.

UBS said: "We don't comment on speculation or views expressed on such matters." Switzerland's finance minister last month said UBS was unlikely to depart as such a move would be more expensive than the new capital rules and legally complex.

UBS says the planned new rules would damage its competitiveness and the bank's chairman has hinted it could consider its future in Switzerland if they are too harsh.

CEO Sergio Ermotti said this week the bank is assessing its ability to compete from Switzerland but is in no rush to act as any new rules will take time to be implemented.

UBS is Switzerland's last remaining global bank. The holding company paid around $1 billion in taxes in 2025, the group's financial statement shows. Banks are by far the largest corporate taxpayers in Zurich, official data show.

An employee group has warned up to 12,000 of about 34,000 UBS jobs in Switzerland could go if the rules prompt the bank to relocate.

The Swiss government document indicates that moving to the United States, seen as one of the main options, would not be easy, even if UBS might avoid the full weight of some new rules.

Under a so-called flat holding structure typical for US-domiciled banks, UBS units would be held directly by the holding company, unlike in Switzerland, the assessment prepared by finance ministry officials noted.

Because of double-leverage and clean-holding restrictions in the United States, assuming a flat holding structure would in essence absorb the same amount of capital as a full capitalisation of both its domestic and foreign units, it said.

In the US, clean holding restrictions aim to keep the holding company of a large bank largely free of liabilities that could make it harder to wind up in a crisis. Double leverage restrictions govern the extent to which a parent company can use debt to capitalise its subsidiaries.

If the US accepted UBS's current parent bank structure following a move, some relief regarding capital treatment of subsidiaries was feasible, the assessment found.

It did not specifically address the possibility of UBS relocating via any kind of merger, a scenario the bank is looking at as a precautionary measure. Nor did it explore the potential economic impact on Switzerland of a UBS departure.

There was also the risk that US rules could change significantly under a change of government, the document noted.

If UBS moved to Britain, the assessment found it would be subject to slightly softer rules on foreign subsidiaries and noted the UK also sometimes grants certain waivers.

By contrast, following British rules would require UBS to hold additional capital for its Swiss operation, because the business would carry a substantially higher risk weighting than it currently does as a domestic investment. All told, it was difficult to make a serious quantitative analysis of the potential changes, the assessment found.

UBS and officials are at loggerheads over government proposals to render the bank more robust by having it 100% back its foreign subsidiaries with Common Equity Tier 1 capital.

The upper house of parliament moderated that slightly last month by approving a proposal for a 90% CET1 capital target, but either requirement is well above what UBS must currently hold.

A lower house committee this week began debating the rules and requested clarifications from the government on several points. Detailed discussions are expected to resume in November before a potential lower house vote in December.