AGL 40.00 Decreased By ▼ -0.01 (-0.02%)
AIRLINK 127.00 Decreased By ▼ -0.99 (-0.77%)
BOP 6.68 Increased By ▲ 0.08 (1.21%)
CNERGY 4.49 Decreased By ▼ -0.11 (-2.39%)
DCL 8.60 Increased By ▲ 0.12 (1.42%)
DFML 41.30 Decreased By ▼ -0.18 (-0.43%)
DGKC 86.71 Increased By ▲ 0.13 (0.15%)
FCCL 32.16 Increased By ▲ 0.02 (0.06%)
FFBL 64.70 Decreased By ▼ -0.72 (-1.1%)
FFL 10.29 Increased By ▲ 0.04 (0.39%)
HUBC 109.51 Decreased By ▼ -0.98 (-0.89%)
HUMNL 14.90 Increased By ▲ 0.15 (1.02%)
KEL 5.05 Decreased By ▼ -0.08 (-1.56%)
KOSM 7.40 Increased By ▲ 0.28 (3.93%)
MLCF 41.39 Decreased By ▼ -0.26 (-0.62%)
NBP 60.60 Increased By ▲ 0.51 (0.85%)
OGDC 190.00 Decreased By ▼ -4.69 (-2.41%)
PAEL 27.81 Decreased By ▼ -0.14 (-0.5%)
PIBTL 7.75 Decreased By ▼ -0.25 (-3.13%)
PPL 149.75 Decreased By ▼ -1.42 (-0.94%)
PRL 26.73 Decreased By ▼ -0.15 (-0.56%)
PTC 16.18 Increased By ▲ 0.18 (1.13%)
SEARL 86.02 Increased By ▲ 7.82 (10%)
TELE 7.72 Increased By ▲ 0.33 (4.47%)
TOMCL 35.58 Decreased By ▼ -0.09 (-0.25%)
TPLP 8.14 Increased By ▲ 0.23 (2.91%)
TREET 16.51 Increased By ▲ 0.62 (3.9%)
TRG 53.35 Increased By ▲ 0.59 (1.12%)
UNITY 26.28 Decreased By ▼ -0.27 (-1.02%)
WTL 1.26 Decreased By ▼ -0.01 (-0.79%)
BR100 9,889 Decreased By -31.1 (-0.31%)
BR30 30,611 Decreased By -140.9 (-0.46%)
KSE100 93,355 Increased By 130.9 (0.14%)
KSE30 28,931 Increased By 46 (0.16%)

Swiss Finance Minister Hans-Rudolf Merz insisted on Thursday that the country is not in the midst of a banking crisis despite fresh huge losses at flagship bank UBS due to the global credit crunch.
Merz, who gave a similar assessment of the banking sector last month, also reiterated that the two largest banks - UBS and Credit Suisse - still have "solid capital bases." He acknowledged that the two banks have been weakened by the recent financial turmoil but insisted that the overall banking industry is stable. He further warned against the instinct to over-regulate and said that it was too early to decide if new legislation should be introduced.
Merz's speech during a Swiss Funds Association meeting came just two days after UBS announced massive write-downs, taking the total damage it has suffered so far from the US subprime mortgage crisis to 37.4 billion dollars (24.0 billion euros). "The substantial losses of the two Swiss major banks are regrettable. Certainly there has been a weakening of the robustness of the two institutes but one must note that our banking system as a whole has remained stable," Merz said.
"With this background, one cannot speak of a banking crisis in Switzerland." He said both major banks still had "solid capital bases and diversified income sources," adding that while lessons can be drawn from the current market turbulence, one must not be overzealous in regulating.
In a parliamentary speech last month, Merz said UBS and Credit Suisse had a "solid capital base" on an international comparison. "They meet the basis surveillance point of view ... the Swiss banking situation is healthy," he said then.
On Tuesday, UBS revealed writedowns of 19 billion dollars (12 billion euros), the single biggest subprime hit so far worldwide. This was in addition to 18.4 billion dollars in assets already written down in 2007.
That put UBS in a net loss of 12 billion Swiss francs (7.6 billion euros, 11.9 billion dollars) for the first quarter of 2008 after a loss of 4.4 billion Swiss francs in 2007, its first-ever full-year loss.
The bank wants to plug the blackhole by asking its shareholders for another 15 billion Swiss francs through a rights issue. The fund raising is the second after a capital injection earlier this year which saw the Government of Singapore Investment Corporation (GIC) and an unnamed Middle Eastern investor put up 13 billion Swiss francs.

Copyright Agence France-Presse, 2008

Comments

Comments are closed.