UBS and Credit Suisse Get Urgent Bailout Funds - Download Free Phim, Nhac, Phan Mem, Karaoke

conmeo · #1 (**permalink**) 10-16-2008, 03:36 AM

PARIS — As the financial crisis continued to roll through world markets despite massive bailouts, the two leading Swiss banks said Thursday they had secured emergency support totalling some $14.1 billion, either from the Swiss authorities or from outside investors including the Qatar Investment Authority.

At the same time, the Swiss National Bank said it had set up a fund to absorb toxic assets from the country’s biggest bank, UBS. The measures offered a sharp contrast to Switzerland’s previous appearance of aloofness from Europe’s government-sponsored rescue operations.

Jean-Pierre Roth, the president of the Swiss National Bank, said it was “preferable that we go ahead with this operation now, in an orderly fashion — despite the fact that the markets have regained a certain degree of optimism in the past few days — rather than at a later point under potentially more adverse conditions.”

He called the rescue “unprecedented with regards to the reasons for it.”

UBS said it would receive a direct injection of government money in the form of mandatory convertible notes worth some $5.3 billion while Credit Suisse, the second largest Swiss bank, said it had raised $8.8 billion from “a small group of major global investors” including the Qatari authorities, which already hold a significant stake. The government injection of funds into UBS could represent a 9percent stake in the bank, whose $44 billion writedowns related to toxic assets have been Europe’s worst.

Credit Suisse also reported a net third quarter loss of $1.3 billion after further writedowns. UBS reported third-quarter net income of $261 million.

The Swiss National Bank said it had created a fund that would enable UBS to transfer $60 billion worth of toxic assets from its balance sheet. UBS said the fund would be capitalized with $6 billion of equity capital provided by UBS and $54 billion from the Swiss National Bank.

UBS said in a statement: “With this transaction, UBS caps future potential losses from these assets, secures their long-term funding, reduces its risk-weighted assets and materially de-risks and reduces its balance sheet.”

The assets transferred into the new fund included $31 billion related to the United States sub-prime and other markets that included mortgage-based securities and securities backed by student loans.

“At completion of the transaction, UBS’s next exposure in these categories will be reduced to nearly zero,” the UBS statement said.

The UBS chief executive, Max Rohner, called the bailout a “definitive move” to accelerate risk reduction in “the extremely difficult market environment.”

For its part, the Swiss government said in separate statement that it was “confident that this package of measures will contribute to the lasting strengthening of the Swiss financial system.”

“The resulting stabilization is beneficial for overall economic development in Switzerland and is in the interests of the country as a whole,” the statement said.

Previously the Swiss authorities had seemed to be standing apart from the wave of bailouts among European countries who have pledged around $1.8 trillion to free up credit markets and support the continent’s banking system. But such is the size of the Swiss banking industry in relation to the overall economy that the Swiss might not have had the resources to bail out UBS and Credit Suisse if they ran into deep trouble.

Shares in both banking giants fell sharply after the series of announcement by the banks and the authorities, matching early declines across Europe’s stock markets following the huge tumbles on Wall Street on Wednesday and in Asia on Thursday. But the Swiss banking shares recovered slightly and UBS shares posted a modest gain by mid-morning.

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