UBS Weighs Options in $26 Billion Showdown With Swiss Government

Top dealmakers from global investment banks have been heading to Zurich in recent weeks to pitch UBS Group AG on transactions that could change the face of Swiss finance.

The bank’s senior leadership has been sitting through presentations as they seek a solution to perhaps its biggest challenge in over a decade: A $26 billion increase in capital requirements leveled by its home government, Switzerland.

Options theoretically on the table range from the dramatic — a merger or acquisition deal with a non-Swiss bank allowing a change in domicile and escape from the oncoming rules — to the more mundane, such ...