The Wall Street Journal has got an article this morning claiming that UBS aspires to, "distance" its investment bank from its Swiss business.
Specifically, it's apparently considering...
...incorporating its investment bank...in London, New York or Singapore, where it would have its own capital and be overseen by local regulators.
This may not be new news. On page 17 of its quarterly report, issued a month ago, UBS already mentioned that it was evaluating potential changes to its corporate structure in view of regulatory requirements in Switzerland and elsewhere.
Nevertheless, ring fencing could have implications for jobs at Broadgate - and not necessarily in a nice way.
According to one banking analyst (who asked to remain anonymous on the grounds that he has yet to write a note on the subject), ring fencing UBS's investment bank from its Swiss operations would probably substantially increase its cost of capital.
"Our research suggests funding costs for UBS investment bank would be 50 basis points higher if it didn't have a substantial balance sheet behind it," he says. "In that case, their current model of using a sizeable balance sheet to subsidise the investment bank would no longer work. They'd have to substantially curb the fixed income business."
Curbing the fixed income business could cost hundreds of jobs, he adds.
UBS has come under pressure to curtail its fixed income aspirations already. It showed signs of succumbing a few weeks ago when senior UBS bankers popped up in the Financial Times claiming the FICC targets might be a bit difficult to achieve.
More positively, most analysts seem confident that if UBS were to incorporate its investment bank outside Switzerland, London would be the obvious choice - after all, it's already operationally headquartered here and the new UK capital requirements for investment banks aren't very onerous after all.
Promisingly, if UBS's investment bank were ring fenced and based in London, some jobs might also be created here. "There might be half a dozen legal and compliance people who'd be required here," postulates Peter Thorne, an analyst at Helvea. "But no more. They'd probably be moved from Switzerland," he adds.