Large Swiss banks well financed: report

 

  

Switzerland's large banks remain well financed and a bankruptcy is unimaginable, the country's finance minister said in an interview published on Sunday.

 

Asked if a bankruptcy was still unthinkable, Hans-Rudolf Merz told SonntagsBlick newspaper: "Yes. A bank's capital resources must have a certain ratio to its loaned out money.

 

"That is the case with our banks. There is no reason for me to consider another scenario."

 

Merz told the Swiss Parliament earlier this week that the country's top banks have a solid capital base despite the writedown of assets.

 

In a separate interview published on Sunday, Switzerland's Economy Minister Doris Leuthard said UBS has a solid capital basis.

 

"It is in a very good position, by international comparisons," Leuthard told newspaper SonntagsZeitung.

 

Switzerland's large banks have been hit hard by the credit crisis, and earlier this year UBS shocked markets when it became Europe's hardest-hit victim of the crisis after writing down $18 billion (Dh66.1 billion) in subprime assets.

 

Credit Suisse said this week it was no longer sure it would post a profit in the first quarter after a handful of traders deliberately mispriced CDO debt derivatives, causing $2.85 billion (Dh10.5 billion) in credit writedowns.

 

Merz also said it was possible for the Swiss government to introduce tougher regulations due to the credit crisis, but would not interfere in the running of companies.

 

"Our possibilities are limited. Oversight bodies are not there to play a role as shadow management of the banks. The oversight bodies, and therefore the state, may not decide over the business model or strategy of a company," he said. (Reuters)