The latest twist in the saga between UBS and Swiss regulators involves banks New York business

Swiss regulators would love the landlocked nation’s crown jewel bank, UBS, to ditch its US subsidiary – and Wall Street tongues are wagging that it finally could happen, On The Money has learned.It’s not the first time speculation has swirled that UBS Americas — which combines a middling investment bank with a strong high-net worth brokerage operation — could be a takeover candidate.Wall Street wealth management heavyweights such as Morgan Stanley and Bank of America’s Merrill Lynch would love to get their hands on its 6,000 brokers who manage something like $2.4 trillion in assets.It also isn’t the first time that UBS has been rumored to do something transformational.

As On The Money reported back in November of last year, UBS Chairman Colm Kelleher and CEO Sergio Ermotti have been chafing over new rules from Swiss regulators that would force them to hold an additional $16 billion in capital.They are said to have considered moving the 164-year-old bank to the US, with executives meeting with the Trump administration about it.Another option is buying a US bank so they can change countries via an acquisition.Both would be difficult for a lot of reasons including the fact that UBS is the biggest in Switzerland and it is known as its high-end private banking clientele that the Swiss government — which rules its banks with an iron fist — probably doesn’t want to be managed out of New York.A more elegant solution would be for the Swiss to keep their in-country private bank and spin off of the US operations, which I am told by my sources inside the bank, is something that the Swiss government banking regulators would love.

The reason: The Swiss are control freaks and hate risk and they see US banks as being powder kegs of risk ever since the 2008 financial crisis.“They would love to get rid of us,” said one senior UBS America’s employee who asked not to be named.“The Swiss see us as a big basket of risk and would be thrilled if we could find...