Swiss bank regulator to probe UBS: report
GENEVA (Reuters) - Switzerland's banking regulator will investigate how UBS (UBSN.VX) ran up losses in the credit crisis requiring billions of dollars of writedowns, a spokesman for the body was quoted as saying on Sunday.
Federal Banking Commission spokesman Alain Bichsel told Swiss weekly Sonntag.CH that the regulator was putting pressure on the world's biggest wealth manager to overcome the crisis quickly and strengthen its capital base.
"In a second step we will investigate how these enormous writedowns could arise," Bichsel said. "And one aspect of that is who was responsible for it."
UBS announced further writedowns of around $10 billion this month, bringing the total to around $14 billion and making it one of the most prominent victims of the credit crisis among banks so far.
A spokesman for UBS was not immediately available for comment.
Banking Commission President Eugen Haltiner told the weekly SonntagsZeitung that as far as he knew UBS had not breached internal lending limits, and that the bank met the commission's requirement to separate risk management and risk supervision.
He said the situation in Swiss banking today was not as serious as in the 1990s, when a banking crisis arising from property lending led to some banks being taken over or receiving public bail-outs as losses consumed capital.
"The timely measures taken by UBS and the obviously conservative provisions have restored the situation to equilibrium to the best of our knowledge," said Haltiner, himself a former senior UBS executive.
He added it was not yet clear whether the writedowns would lead to actual losses, and the provisions, while large, should be seen in the context of the bank's size and capital.
"The existence of UBS was never threatened," he said.
He said it was prudent to assume that there would be further corrections in the market resulting from the crisis.
But so far UBS was the Swiss bank most affected, with Credit Suisse (CSGN.VX) less exposed to subprime business and other banks either not affected at all or only marginally.
DISCONTENT AND DISQUIET
The losses at UBS have prompted discontent among shareholders and open disquiet within Switzerland's normally secretive banking industry, with other institutions concerned at the damage done to the country's standing as a financial centre.
UBS sold a stake of roughly 9 percent to the Government of Singapore Investment Corporation, and a second smaller stake to an investor from the Middle East, named on Friday by the Financial Times as Saudi Arabian investors. UBS has declined to comment on that report. Continued...
