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UBS and Credit Suisse bailed out

Posted By admin On October 16, 2008 @ 4:01 am In Money Watch | Comments Disabled

David Gow
London Guardian [1]
Thursday, Oct 16, 2008

Switzerland’s two biggest banks today turned to the country’s government and sovereign wealth funds to bail them out in a fresh wave of instability in the global financial sector.

UBS, Europe’s biggest casualty of the sub-prime crisis and the larger of the two, received a Sfr6bn (£3bn) capital injection from the government in the form of mandatory convertible notes.

Credit Suisse is raising Sfr10bn from private investors and the Qatar Investment Authority as it wrote down a further Sfr2.4bn in its investment bank which delivered a pre-tax loss of Sfr3.2bn in the third quarter. CS as a whole said it expected to announce a net loss of around Sfr1.3bn next week.

(Article continues below)

The surprise operation came after Wednesday’s joint move by the Swiss National Bank and the European Central Bank to inject billions of liquidity into the Swiss system. But shares in both banks fell 6% in early trading.

The operation’s scale underlines the continuing turmoil within the west’s banking sector, with the Swiss banking commission and central bank forcing the two institutions to raise their capital ratios significantly. Credit Suisse said its would jump to 13.7%.

The Swiss authorities underlined the depth of the crisis by saying UBS had been hit by “massive” outflows of clients’ money as investor confidence had crumbled.

Full article here [1]

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URLs in this post:

[1] London Guardian: http://www.guardian.co.uk/business/2008/oct/16/ubs-creditsuisse

[2] China consumers to overtake U.S. in a decade: Credit Suisse: http://www.prisonplanet.com/china-consumers-to-overtake-u-s-in-a-decade-credit-suisse.html

[3] Credit Suisse Goes For Broke: Predicts End Of Euro, Bank Runs: http://www.prisonplanet.com/credit-suisse-goes-for-broke-predicts-end-of-euro-escalating-bank-runs-on-strongest-european-banks.html

[4] Credit Unions Bailed Out: http://www.prisonplanet.com/credit-unions-bailed-out.html

[5] Stress Tests Prove that Credit Default Swaps Still Pose a Huge Risk to the Economy: http://www.prisonplanet.com/stress-tests-prove-that-credit-default-swaps-still-pose-a-huge-risk-to-the-economy.html

[6] YouTube is losing money hand over fist, says Credit Suisse. As is Twitter.: http://www.prisonplanet.com/youtube-is-losing-money-hand-over-fist-says-credit-suisse-as-is-twitter.html

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