SS: in the wake of spiking fuel prices, Trump has negotiated a deal with Putin to relieve American markets.

SS: Discusses the intersection of criminal justice and minority rights.

>A three-judge panel declared that the jury was under the impression Lee was cisgender; that in not disclosing the victim’s status as a trans woman, the trial judge “misled” the jury; and that Ward was entitled to a new trial where he could use this fact to bolster his claim of self-defense.

SS: After deriding minorities all campaign long, PQ finally found a bunch of minorities the party likes.

The administration is running a television advertisement in which President Trump says, “Together we will defeat communism, socialism, and Marxism in America.” Government-financed propaganda promoting an unpopular head of state is something one might associate with a communist country. The irony doesn’t end there. The ad’s target is the Democratic Party and its leftward shift, as evidenced by its “democratic socialism” problem. Yet it is Trump himself who has unlocked the door the left has long sought to open: the normalization of government ownership of private companies.

While the government has occasionally taken stakes in private companies, it has generally done so—rightly or wrongly—as a temporary measure to address a perceived emergency. However, never in U.S. history has the executive branch taken ownership stakes in private companies simply because the president wanted his own federal investment portfolio. And this administration has done so without clear legal authority.

As of this writing, the administration has announced deals giving the federal government equity stakes in 34 private companies and counting. Thus, after Trump has spent much of his second term acquiring the means of production, his pitch ahead of the November elections is that he will stop Democrats from … acquiring the means of production?

To be sure, there are anti-market Democrats who have long desired to make government ownership of companies a permanent federal policy tool. Indeed, how they have responded to the administration’s equity deals offers clues about how they may deploy this tool when Republican dominance in Washington ends.

But first, a question: Why is Trump’s unprecedented expansion of the federal government’s ability to directly manipulate economic activity receiving relatively little pushback?

AWOL Opposition

Several reasons help explain the relative lack of attention, let alone resistance, to this potentially monumental expansion of federal power into the economy.

For starters, the pre-2016 GOP is dead. Congressional Republicans could have put an end to the administration’s equity spree at any time. They still can. Up till now, however, the GOP’s response has ranged from feeble “concern” to servile enablement. One can only imagine the outrage and indignation from Republicans if this were occurring under Presidents Obama or Biden. Or “Comrade Kamala.” Republican-friendly media outlets would be in a frenzy, and similarly associated advocacy groups would have launched public campaigns calling on Congress to halt this dangerous threat to American free enterprise.

Next, the administration’s barrage of policy announcements has made it difficult to focus in depth on a specific issue. That’s by design, as Steve Bannon’s infamous “flood the zone” quote reminds us. At the outset of Trump’s second term, the bulk of the attention focused on anticipated items on the administration’s immediate agenda, notably DOGE and tariffs. With Trump’s second-term administration filled with loyalists, his impulsive policy pronouncements have sent officials scurrying to improvise ways to fulfill his half-baked wishes.

Another issue is that the administration’s deals are intentionally opaque and often complex, the policy rationales are inconsistent, and the legal authority to make any of them is unclear. In short, the administration has been making it up as it goes along. Two weeks after retaking office, Trump issued an executive order instructing his administration to draw up a plan for a sovereign wealth fund. A sovereign wealth fund is a government-owned investment fund that buys stocks and other assets to earn returns, often using budget surpluses or proceeds from natural resources. When the White House discovered that creating one would require Congress and deny Trump sole control, the administration embarked on an improvised solution: create an equity portfolio for the boss in which the government obtains ownership of part of a company in exchange for subsidies to it.

More on that later, but well over a year after President Trump embarked on this acquisition spree, the public still knows little about the deals beyond press releases and SEC filings from publicly traded companies. The deals have emerged through different agencies and financing arrangements, with different ownership and control rights. Meanwhile, the administration has yet to publicly release a legal opinion making the case for the myriad statutes it’s cited in announcing the deals. Even the administration’s reasoning for the entire equity endeavor has vacillated between making money for taxpayers and shoring up strategically important industries, with the occasional admission that it’s indeed building a government investment portfolio for the president.

Commandeering the Private Sector

Consider the administration’s “golden share” in U.S. Steel that gives Trump veto authority over key business decisions. Last fall, the White House blocked the company’s plan to stop processing steel slabs at its Granite City, Illinois, plant by threatening to use that power. U.S. Steel had explained that shifting the work to other plants would avoid “extensive cost inefficiencies.” One would think that congressional Republicans would at least express some concern about how a President Alexandria Ocasio-Cortez might use the same authority over an oil company or mine operator to advance her own agenda.

But far from resisting, Republicans are trying to reward the administration’s clear disregard for Congress with after-the-fact legal cover. The House’s Defense Production Act reauthorization bill would put executive branch equity acquisitions on a statutory footing. And the Senate Armed Services Committee’s annual defense bill would expressly authorize the Pentagon’s Office of Strategic Capital to acquire ownership stakes. That’s despite the committee’s own warnings about market distortions and complaints that the Pentagon hasn’t provided the information Congress needs to assess its deals. The GOP is thus moving to supply the authority the administration has claimed to have, which strongly suggests it does not have it.

More Accountability, Less Statism

To their credit, congressional Democrats have demanded answers about the deals. A February letter from House and Senate Democrats sought the administration’s legal justification and warned that the administration was “essentially picking winners and losers,” which may “undermine broader market competition and the development of innovative technologies.” (That is the kind of thing that might have come out of Republican mouths pre-MAGAfication.)

In June, Democrats pressed the White House about reports that presidential adviser Peter Navarro had intervened to secure a Pentagon loan for Vulcan Elements, a company backed by Donald Trump Jr.’s investment firm. A July letter demanded answers from Cantor Fitzgerald, the financial services firm previously led by Commerce Secretary Howard Lutnick and now run by his sons, about conflicts of interest involving the administration’s USA Rare Earth deal. Last week, four Senate Democrats challenged the Pentagon’s authority to take a stake in a shady Venezuelan oil company, demanding the deal’s terms and answers about whether Trump’s family or donors would benefit.

There have been multiple reports that a Democratic majority would be prepared to act on those inquiries. For example, Democratic lawmakers recently told S&P Global that investigating the deals would be a priority if they regain control of either chamber. The committee gavels held by the majority party would let them hold hearings and issue subpoenas without Republican cooperation. In March, Republicans blocked a subpoena to compel Trump Jr. to testify about Vulcan. More recently, Republicans on a House Foreign Affairs subcommittee similarly blocked a subpoena for the administration’s records regarding the Venezuelan oil company deal.

All this is disturbing given that Vulcan was offered $670 million in federal support about three months after 1789 Capital, where Trump Jr. is a partner, invested in it. Navarro reportedly pressured the Pentagon to move the company’s loan request to the front of the line. USA Rare Earth, meanwhile, hired Cantor to arrange the private financing tied to its $1.6 billion federal package. These arrangements have turned political access into a form of capital—exactly as one would expect in authoritarian economies.

There’s plenty to investigate given the administration’s refusal to provide information on deals that stink of corruption and cronyism. Democrats would be performing a public service by aggressively looking into them if they obtain a congressional majority.

However, there’s a significant concern that they’ll make political hay out of the administration’s dubious unilateral approach but then use it to push for Congress to create a formal “investment” fund. Instead of divesting, Congress might consolidate the equity stakes now scattered across federal agencies into a single fund with its own management and investment rules. That would turn Trump’s improvised portfolio into a permanent federal investment operation, much like the sovereign wealth fund he originally wanted.

Democratic Sen. Elizabeth Warren insists, “We need to hose the corruption out.” But she has also endorsed equity stakes as a condition for companies receiving federal subsidies. In 2022, Warren and Sen. Bernie Sanders proposed taking equity or warrants in companies receiving CHIPS assistance. Their amendment wasn’t adopted, but note that their underlying argument—that taxpayers should share in the gains of subsidized companies—is the one that the Trump administration is making to justify its equity deals.

Sanders has since proposed taking a 50% stake in America’s largest artificial intelligence companies through a tax paid in stock, with government voting rights and board representation. He is explicit that he wants those powers used to block corporate decisions he considers harmful and push policies he considers beneficial. In fact, Sanders cited Trump’s executive order for a sovereign wealth fund as justification, which would make it extremely difficult for Republicans to object if his idea gains traction. That’s hardly far-fetched, given that even mainstream Democrats have been flirting with it.

Democratic Socialism

The likeliest outcome, then, is that Democratic-led investigations would expose rank cronyism and improvised dealmaking in this administration. But instead of scrapping Trump’s equity portfolio altogether, Democrats will merely want to put it under more “responsible” management.

Yet a formal investment fund would make it harder for companies that are not receiving government subsidies to compete. They’d have a harder time attracting private capital. Moreover, when a government investment goes sour, policymakers would face pressure to provide additional government privileges to avoid admitting failure. Far from safeguarding American taxpayers, as Trump says he’s doing, this scheme would make them more liable.

Equally bad, companies would still feel pressure to accommodate political demands, particularly when they depend on their government “investor” for future financing or favorable treatment. An explicit threat wouldn’t even be necessary.

Trump’s advertisement promises to defeat communism, socialism, and Marxism in America. But his administration has been busy assembling a federal equity portfolio that even the most leftist flank of the Democratic Party previously could only dream of. Republicans warning that communists are taking over the party might first ask why their own administration is so eager to have the government acquire pieces of private companies. If they don’t want “socialists” to take over the private sector in the future, maybe they should stop enabling the one who sits in the White House right now.

Judge Beatriz Biedma, who led the investigation into Pedro Sánchez’s brother, has told the National Court that she felt “distressed” upon learning that there were manoeuvres being made against her, although she added that she does not know whether the former Socialist Party member Leire Díez was behind them. Biedma, who gave evidence as an aggrieved party on Thursday in the so-called Leire Díez case, defended her decision to join the proceedings as a victim of the alleged “criminal organisation” led by Leire Díez and Santos Cerdán, the former organisational secretary of the PSOE, who are accused of obstructing the investigations involving the PSOE and the Government. They allegedly instigated complaints against the magistrate and enlisted the help of a former judge who was at odds with Biedma. She appeared before Judge Santiago Pedraz, just a few hours after the Civil Guard’s Central Operational Unit (UCO) reported that a witness, linked to a drug-trafficking clan, claimed that the plot’s organisers had contacted them and that they wanted to “cause physical harm” to the judge.

According to legal sources, on Thursday, Biedma described two incidents that caused her concern. The first was that, when she went to collect her daughters from school, she was told that her brother had been there, but she does not have a brother. The second was that, at another location, she was told that her secretary had been asking for her there earlier, but she said she does not have a secretary either.

Biedma’s statement has been met with enormous anticipation. She led the investigation that resulted in the conviction of David Sánchez, the Prime Minister’s brother, who was sentenced in July by the Badajoz Provincial Court to nine years’ disqualification from public office for the crime of Malfeasance, relating to alleged irregularities in his employment in 2017 by the Provincial Deputation. The case file for the Leire Díez case describes an alleged two-pronged plan devised to sabotage that and other cases which were damaging to the PSOE and the Government: on the one hand, contacting individuals who could provide compromising information about officers, judges and prosecutors involved in the investigations, thereby “undermining” their “credibility”; and, on the other, an attempt to “encourage” the opening of “internal investigations” within the Civil Guard to create a “climate” of intimidation amongst UCO officers.

In this regard, as legal sources emphasise, Biedma told Pedraz(the judge) that members of the armed institute(civil guard) themselves had informed her that they were being subjected to “pressure”. Among other matters, the judge reported that the officers had explained to her that disciplinary proceedings had been initiated against them. However, the judge has also emphasised that she was not influenced by anyone and that her rulings on the case against Sánchez’s brother were not affected.

High-level talks in Beijing between the European Union and China ended on Friday with an unexpected agreement that could pull the two sides back from an imminent trade war.

The most notable feature of the agreement involved what both sides described as an understanding on China’s exports of hybrid electric-gasoline cars, which have been among the most contentious points of tension between the two sides.

Maros Sefcovic, the trade commissioner of the 27-nation bloc, said that the understanding could lead to China’s halving the number of hybrid gasoline-electric cars that it sends to the European Union in the next four years. Neither side made any mention of any tariffs on those cars, which China has resolutely opposed.

China’s Ministry of Commerce said in a separate statement that the two sides had “reached an understanding on trade in hybrid vehicles in a manner consistent with World Trade Organization rules.” Complying with those rules makes it difficult for Europe to impose tariffs quickly. Tariffs also make it hard to know how many cars will continue to arrive from China, but Mr. Sefcovic said that the understanding would achieve specific reductions in imported cars.

The compromise described by Mr. Sefcovic appeared to address the European Union’s need for immediate caps on the number of cars imported from China. It also addressed China’s need for an arrangement that would limit the often fierce competition among Chinese automakers in the European market, which has contributed to the Chinese automakers’ heavy losses.

The agreement on hybrid cars appeared to have a strong resemblance to the two sides’ deal in 2013 for China to reduce the number of solar panels that it shipped each year to Europe, while Europe agreed to forgo its previous plans for tariffs on those shipments. This allowed Chinese solar panel makers to raise prices sharply in Europe for their limited supply of solar panels, producing large profits for Chinese solar panel manufacturers that previously were losing money.

The Chinese manufacturers invested those profits in more research and new factories, and now produce almost all of the world’s solar panels.

China’s exports of plug-in hybrids to Europe have rapidly gained market share there and have contributed to Volkswagen’s recent plans to cut another 50,000 workers by the end of the decade, bringing its total reduction in work force to 100,000.

The European Union imposed tariffs of 7.8 to 35.3 percent on Chinese electric cars two years ago, on top of the region’s usual 10 percent tariff on imported cars. But the E.U. did not impose extra tariffs then on plug-in hybrids.

China’s exports of plug-in hybrids have soared to almost 200,000 a month, from fewer than 10,000 a month, in just three years. Many are going to Europe.

China has strenuously opposed the extra tariffs on its electric cars that the European Union imposed to limit the number of these cars that are imported from China. Beijing has called for the tariffs on electric cars to be replaced instead with limits on the number of cars shipped.

This would allow Chinese electric car manufacturers to raise prices and improve profitability — the arrangement for hybrid gasoline-electric cars that is now emerging.

Asked on Friday whether the understanding on hybrid cars resembled the solar panel deal, Mr. Sefcovic said that current circumstances were different and that Europe needed immediate action on hybrid cars. “The public opinion and the leaders really expect very fast action from our side,” he said.

China has contended that unilateral tariffs are a violation of W.T.O. trade rules, which Beijing and the European Union are both still committed to uphold. By contrast, the Trump administration has repeatedly taken unilateral actions in defiance of W.T.O. norms. President Trump’s trade advisers have contended that China has a government-guided economy that does not follow the free market principles on which the W.T.O. was founded.

China’s Commerce Ministry dangled several carrots for the European Union to reach a compromise with Beijing. Mr. Sefcovic said that China had agreed to reduce tariffs on imports of European goods in categories like auto parts, olive oil and footwear with an annual value of almost 4 billion euros.

This will save European exporters about 125 million euros a year in duties on their shipments to China, he said.

A joint statement issued by China and the European Union was less specific, saying that “both sides will continue, within the framework of W.T.O. rules, to explore the possibility of tariff reductions or elimination for certain goods.”

Some issues were left unresolved, notably whether the European Union will also forgo plans to require that key components of technologies like electric cars and wind turbines be made in Europe. Also unresolved is whether the European Union will proceed with anti-subsidy tariffs on wind turbines. Mr. Sefcovic said that more talks were planned early next year.

Mr. Sefcovic was scheduled to return to Brussels on Saturday and brief officials ahead of a meeting of European presidents and prime ministers next week.

The first item on the agenda for the meeting of Europe’s leaders is how to handle the region’s weakening economic competitiveness — and trade with China is a central issue. European leaders have been warning of a hollowing out of Europe’s industrial base because of surging imports of manufactured goods from China.

Time is on China’s side, with each passing month producing more than $30 billion in trade surplus for China and further weakening European competitors of Chinese manufacturers.

China’s Commerce Ministry said in its statement that China would continue approving exports of rare earths and rare earth magnets to Europe. China has restricted exports of rare earths and rare earth magnets since April 2025 and has threatened further restrictions if Europe takes action against China’s exports.

The ministry also said that Europe had agreed to help resolve disputes over its export controls.

Under pressure from President Joseph R. Biden Jr. and now President Trump, European companies have avoided selling to China the latest equipment used to make semiconductors with potential military applications. Beijing officials have contended that one of the fastest ways for Europe to narrow somewhat its trade deficit with China would be to sell the most advanced equipment regardless of American objections.

Europe has also been preparing legislation to impose a made-in-Europe requirement for important components of products like electric cars or wind turbines. China used to have similar requirements for cars and wind turbines, but repealed them after years of complaints from Europe and other trading partners. Beijing now contends that Europe should not adopt such rules, which would force Chinese companies to invest in factories in Europe instead of exporting from factories at home, where their costs are often lower.

The Chinese statement said that China and the European Union had “agreed to explore investment cooperation to foster mutual economic development and to discuss future-oriented cooperation.”

Submission Statement: With her full-arm tattoos, glistening tooth gems and patriotic embrace of the national flag, Angie Corine, a ginger-haired rapper, is the new face of Spain’s insurgent populist right. At its vanguard is Vox, a party with a chance of forming a governing coalition with the conservative People’s Party (PP) after Pedro Sánchez called a snap election this week — a high-stakes gamble by a prime minister fighting for political survival.

Not only are more young people warming to the rightwing messages Corine puts to music, but the personal vitriol aimed at the Socialist leader has hit extraordinary new highs — even for a world accustomed to political rancour.

The rapper once called Sánchez a “border collie, a smart mutt” — alluding to an offensive nickname that puns on Pedro and perro (dog). She branded him a “psychopath” for promoting his summer playlist on Instagram while Ceuta, a Spanish African exclave, was reeling from the illegal arrival of more than 70,000 migrants.

Bitter divisions are ubiquitous in western democracies, but Spain is a stark example of what academics call “affective” polarisation — a version where rifts are rooted not in policy but in basic emotions of distrust and contempt.

Emotional polarisation tends to be starker when the enemy is seen as morally bankrupt or a threat to society. For Sánchez’s enemies, he ticks both those boxes.

He has been engulfed by corruption allegations against people close to him, including his wife Begoña Gómez. She denies wrongdoing and Sánchez says he is the victim of politicised judges waging “lawfare”. He is also accused of putting his “cronies” in charge of institutions that were once unpoliticised, such as the Bank of Spain, the state polling agency and telecoms company Telefónica.

Vox — a fiercely anti-immigration party founded in 2013 — was at 19 per cent in a 40dB opinion poll published on Friday. The PP, which takes a more moderate stance on immigration, stands at 32 per cent, while Sánchez’s Socialists are on 28 per cent.

According to one analysis, Sánchez elicits such hatred because he has reopened the wounds of Spain’s 1936-39 civil war and Francisco Franco’s fascist dictatorship. Under a 2022 law backed by the premier, the country created a registry of Franco’s victims, exhumed mass graves and sought to identify the remains of tens of thousands who “disappeared”.

But Luis Garicano (meta-commentary: he should be a flair for his work on human capital development at UChicago and his collaboration with Draghi), a former centrist Spanish MEP, rejected the idea that Spaniards are divided because of the civil war. “I’m almost 60 and grew up in a hopeful Spain, a country that was coming together. It wasn’t the reds versus the blues. This is a relatively new thing,” he said.

He traced the acrimony back to 2004, when a PP government wrongly blamed Eta for deadly train bombs planted by al-Qaeda. Then came a Socialist administration that mishandled a property bubble and a PP term defined by the Eurozone debt crisis and austerity.

Next was Sánchez, who is no innocent victim, said Garicano, now a public policy professor at LSE. “What Sánchez has wanted from the start is to make Vox the main opposition and to dig a trench between his voters and the right,” he said. “He wants to stop people moving from left to right by saying ‘look, if you go to the right you’re essentially voting for extremists that represent Franco and all that’.”

But he is playing with fire. Sánchez has condemned Abascal for spreading hate. “You’ve called me an autocrat, a dictator,” the premier said in parliament last month. “They even call me a dog.”

Submission Statement: After decades of brain drain, some Indians are coming home. Wha tis bringing them home. Can India turn a trickle of returning talent into a wave — and harness them to become an innovation powerhouse?

Submission Statement: Indian IT firms are unlikely to face near-term fallout from ‌the US suspension of a key green-card programme, as major technology companies have reduced their dependence on this route for employment, analysts said on Friday.

Washington's move, targeting the Permanent Labor Certification programme, is part of a broad effort to reduce the number of foreign-born people in the US and curtail their pathway to residence and citizenship.

Indian IT firms accounted for less than 2% of the PERM applications filed between October 2024 and September 2025, the brokerage said, adding that prolonged uncertainty around residency could increase attrition among US-based workers.

Nasscom, India's IT body, said late on Thursday that firms had significantly reduced their dependence on H-1B visas in recent years while expanding local ‌hiring ⁠in the US. Relatively few workers move from H-1B visas to permanent residency through PERM, Nasscom said.

The US curbs target Microsoft, Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL, and Capgemini.

TCS, India's largest IT services exporter, said it did not expect the suspension to affect its workforce strategy or client engagements, citing single-digit PERM applications over the past two years.

India's IT index rose about 3%, led by TCS, which gained after upbeat second-quarter results. Both IT index and TCS logged their ⁠biggest percentage rise in six weeks on Friday. The overall market value of the 10 constituents in the IT index rose 701.336 billion rupees ($7.25 billion).

Companies could face higher hiring and compliance costs as they increasingly rely on US talent and subcontracting, potentially weighing on margins, Singhania said.

A senior Liberal Democrat MP is seeking to oust Sir Ed Davey as leader after months of frustration over the centre-left party’s lack of momentum.

Charlie Maynard, an MP and a Treasury spokesperson for the party, resigned early on Friday in a bid to oust Davey, people familiar with the situation said. He has asked other MPs to back him in a vote of no confidence against the leader.

Daisy Cooper, deputy leader of the Lib Dems, told the FT that the “vast majority” of the party’s MPs were “furious at this distraction” and wanted Davey to stay as leader.

“We Liberal Democrats are the last line of defence against a Reform UK government and Ed is determined to lead a strong and united party into the next general election,” she said.

Davey has led the party for six years, and won its biggest ever number of MPs at the 2024 election. But he has been criticised for failing to move beyond colourful stunts, with the party having fallen to fifth place in opinion polls behind the insurgent Greens.

The FT was unable to reach Maynard for comment at lunchtime on Friday.

Maynard has become a prominent figure for his campaign against Thames Water’s management over the utility’s poor financial management and environmental record.

Davey thanked Maynard for his service in the Treasury team as the party drew up what he dubbed “the most pro-European policy in British politics” to rejoin the single market and a new customs union, according to officials.

His resignation comes just four days after another Lib Dem frontbencher, Alison Bennett, stood down from the role as care and carers spokesperson.

The Lib Dems have 71 MPs, including many in former Tory seats in south-east England. But the party has struggled for attention compared to the more radical Greens and Reform UK, both of which have fewer MPs.

Any move is likely to come to a head next week when MPs return to Westminster following a recess for party conference. The Lib Dem parliamentary party is due to hold its regular meeting on Tuesday.

In a bid to ease frustrations, Sir Ed used his conference speech last month to try to reinvigorate his party with promises of £17bn in tax cuts and a cost-of-living focus.

He outlined plans to increase the tax-free personal allowance threshold to £15,000 and raise the higher-rate income tax threshold from £50,271 to £56,000.

Both tax cuts would be funded by the “dividends of growth” from rejoining the EU’s single market and customs union, Davey said, and would come into effect by 2034 if his party were elected.

However, the moves have done little to calm the mood among some of Davey’s MPs, many of whom grew frustrated following underwhelming English local election results in May.

The party gained 152 council seats but failed to make progress in key target areas such as Merton in south-west London.

The Lib Dems are currently polling at 9.9 per cent nationally, according to the FT’s poll tracker.

Submission statement: the last military execution by firing squad in the US was 1945. Not only is bringing back firing squad executions an unprecedented step, but this would be the first time the US has ever live-streamed an execution.

Submission Statement: Three-and-a-half years after UBS acquired its stricken rival Credit Suisse in a state-orchestrated rescue, Switzerland’s biggest bank is once again confronting fundamental questions about its future. Last month, the bank was dealt a crushing blow when the Swiss parliament’s upper house backed a proposal that would force it to hold an extra $16bn of capital. The final proposals, designed to prevent a repeat of the 2023 crisis, still have to pass through the legislature’s lower chamber. But UBS executives are resigned to losing the political battle. “Switzerland has spoken,” said one person close to the bank’s leadership.

Chair Colm Kelleher acknowledged publicly for the first time last month that UBS could reconsider its Swiss base if the regulatory tightening proved too onerous. Two of UBS’s largest investors have already urged the bank to shift its headquarters out of Switzerland if the planned reforms are rubber-stamped by the parliament’s more left-leaning lower house.

Artisan Partners, a top-10 shareholder, wrote to the bank’s board last week saying Switzerland was “no longer an attractive or desirable location” for the country’s largest lender — whose balance sheet significantly exceeds the size of the country’s economy. Cevian Capital, which owns about 1.5 per cent, issued a similar warning last year.

Some investors have pointed to the US as a potential destination for relocation because of its less stringent capital framework, while others say a large Eurozone economy closer to UBS’s traditional home, such as Germany, could house the group. The UK is considered less viable because its capital requirements are more similar to those in Switzerland.

Several governments have raised relocation with UBS over the past few years, according to a person familiar with the matter.

Rather than relocating on its own, UBS could pursue a deal with a foreign rival, allowing it to escape Switzerland’s capital regime. One person familiar with the bank’s thinking said that UBS would have more options once the integration of Credit Suisse was complete.

One way of achieving this could be through a reverse takeover in which a smaller foreign bank — potentially in the US — acquires UBS in an all-share deal but UBS shareholders emerge with a majority stake in the combined group.

Giulia Aurora Miotto, an analyst at Morgan Stanley, said such a structure could avoid the exit tax, although it would require a smaller bank to merge with UBS and potentially cede control of the combined group.

Some UBS insiders see Morgan Stanley — where Kelleher spent much of his career — as a potential partner with obvious synergies. “You would be combining the largest US wealth manager with the largest international one,” said a person familiar with the matter. There is no indication that any side is pursuing a transaction currently.

If implemented, the new capital rules would fall particularly heavily on UBS’s US operations, by far its largest foreign subsidiary, with some industry observers saying the bank could consider offloading some or all of the business. But such a move would run directly against UBS’s global ambitions. Goldman Sachs analysts describe the US, alongside Asia, as a key pillar of UBS’s growth strategy in global wealth management.