GENEVA, April 6, 2008 (AFP) – Swiss ministers and financiers are striving to reassure markets and citizens there is no banking crisis even as the once-mighty UBS totters after losing billions of dollars in subprime exposure.
UBS, the country’s biggest bank and once a byword for safe, reliable investments, now has the dubious distinction of being the world’s biggest subprime loser after fresh writedowns this week drove its total damage to 37.4 billion dollars (24 billion euros).
But politicians and senior banking officials have been at pains to stress that UBS’ woes are not symptomatic of a wider malaise affecting the whole financial system.
Finance Minister Hans-Rudolf Merz has repeatedly said in recent weeks that there is no need to panic despite the vast losses at UBS and similar — if less extensive — writedowns at rival Credit Suisse.
Credit Suisse warned last month it could suffer a first quarter loss, citing exposure to the US subprime crisis, and said some of its traders had engaged in “intentional misconduct” and had been suspended.
“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