Swiss lawmakers have backed a motion to return major UBS banking legislation to the Federal Council ahead of an upper-house vote on Thursday, potentially clearing the way for the government to impose stricter capital requirements. The dispute follows Credit Suisse’s collapse in March 2023 and its subsequent acquisition by UBS. The government’s plan would require UBS to fully support its foreign units with Common Equity Tier 1 (CET1) capital, adding about $20 billion to its requirement; some analyses have put the figure as high as $22 billion. UBS says the approach would disadvantage it against international rivals. An upper-house committee’s compromise would allow UBS to use $13 billion of Additional Tier 1 (AT1) capital for its foreign units and was previously described as a 50/50 CET1-AT1 structure. The motion, backed by lawmakers including Andrea Caroni of the FDP, still requires approval from the lower house if passed. Finance Minister Karin Keller-Sutter says tougher rules are needed to protect taxpayers from future banking failures, while the FDP remains divided and the Centre party’s Fabio Regazzi has said several outcomes remain possible.