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Swiss banks raise emergency funds

Swiss banks raise emergency funds
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Switzerland’s top two banks have taken emergency measures to shore up their finances. Credit Suisse is raising new funds from private investors while the Swiss government is to take a 9.3 percent stake in UBS for four billion euros. And in another move to recover investor confidence, UBS will also unload billions of euros worth of toxic assets into a new fund backed by the Swiss central bank.

Jean-Pierre Roth, Chairman of the Swiss National Bank, said: “We’re going to go ahead with this very important 54 billion dollar operation. In taking on this portfolio of assets we are taking a risk and we’ve analysed that risk. There is this portfolio, which lacks liquidity and that is the problem for UBS. It can’t sell those assets on the market; there are some that are good and some that are not so good, but our analysis of the situation is that we can cope with this.”

Credit Suisse, which made a quarterly net loss of about 850 million euros following more writedowns on risky assets, said it does not need any government money right now. It is getting 6.5 billion euros from investors including Qatar, which is already a big shareholder, as well as groups in Israel and Saudi Arabia. Analysts said the recapitalisations stabilise things but also underlined how serious the situation was.

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