ZURICH: UBS and the Swiss government signed on Friday (Jun 9) an agreement to cover up to 9 billion Swiss francs (US$10.00 billion) in losses from its
The deal comes with various conditions, including a requirement that UBS keeps its headquarters in Switzerland, the government said in a statement.expected as early as Jun 12The guarantees will kick in if UBS incurs losses from the sale of Credit Suisse assets beyond 5 billion francs that the lender is due to cover itself.
"To make the takeover possible, the government granted UBS a guarantee for any losses incurred in the liquidation of Credit Suisse assets," the government said in a statement. The government said the guarantee covered assets with a volume of around 44 billion Swiss francs, an equivalent of about 3 per cent of the combined assets of the merged group, mainly made of derivatives, loans, legacy assets and structured products. Valuations of the losses are expected to be made available during the third quarter of 2023, the government said, while their scale is"highly dependent on the actual wind-down of the assets concerned and market developments" it said.
The government said the agreement did not mention any federal participation in losses above the total agreed 14 billion francs because such a commitment would require"a legal basis as well a parliamentary approval of a corresponding guarantee credit".Both the authorities and UBS are keen to assure the Swiss public that the takeover, orchestrated with the use of emergency laws and backed by public funds, will not become a burden for the taxpayers.
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