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Interest rate benchmark reform
 6 Months Ended
Jun. 30, 2022
Entity [Table]  
Disclosure of how entity is managing transition to alternative benchmark rates, its progress at reporting date and risks to which it is exposed arising from financial instruments because of transition [text block]
Note 13
 
Interest rate benchmark
 
reform
During 2022,
 
UBS has continued
 
to manage the
 
transition to
 
alternative reference
 
rates (ARRs)
 
under the oversight
of the
 
dedicated
 
Group-wide
 
forum, with
 
an increased
 
focus on
 
the US
 
region. The
 
transition of
 
non-USD
 
interbank
offered rates (IBORs) is largely
 
complete, with efforts now focused on managing the transition of remaining
 
USD
LIBOR exposures.
On
 
15 March
 
2022,
 
the
 
US
 
enacted
 
federal
 
legislation,
 
the
 
“Adjustable
 
Interest
 
Rate
 
(LIBOR)
 
Act,”
 
which
 
is
substantially based
 
on, and supersedes,
 
the New York
 
State London
 
Interbank Offered
 
Rate (LIBOR) legislation.
 
The
Adjustable Interest Rate
 
(LIBOR) Act provides a legislative
 
solution for USD LIBOR
 
legacy products governed by
 
any
US state law should
 
such products fail
 
to transition prior to the
 
USD LIBOR cessation
 
date of 30 June 2023.
Non-derivative instruments
Most
 
of
 
the
 
USD
21
bn
 
mortgages linked
 
to
 
CHF
 
LIBOR
 
that
 
were
 
outstanding as
 
of
 
31 December 2021
 
were
automatically transitioned
 
to
 
Swiss
 
Average
 
Rate
 
Overnight (SARON)
 
during
 
the
 
first
 
quarter
 
of
 
2022. A
 
small
number of transitions
 
took place in
 
the second
 
quarter of 2022,
 
with the remaining
 
due to transition
 
later in 2022,
on their
 
next roll
 
date. Substantially
 
all of
 
the US
 
securities-based
 
lending outstanding
 
as of
 
31 December 2021
 
was
transitioned to
 
Secured Overnight Financing
 
Rate (SOFR) during
 
the first
 
quarter of
 
2022.
 
In January
 
2022, UBS
completed the transition of USD LIBOR-linked non-derivative balances
 
related to brokerage accounts to SOFR. No
other material transitions
 
of USD LIBOR-linked
 
contracts occurred
 
in the first half
 
of 2022.
Derivative instruments
UBS successfully transitioned the
 
remaining non-USD IBOR derivatives not
 
transacted through clearing houses or
exchanges during the first quarter of 2022,
 
which ensured an orderly transition when converting
 
high volumes of
transactions at the time
 
of rate cessation. No material
 
USD LIBOR-linked
 
derivatives have transitioned
 
in 2022.