UBS's $26 Billion Capital Hit Isn't Quite as Bad as It Seems
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 investor 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.
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