The Swiss government has injected six billion Swiss francs into banking giant UBS, while the country's central bank has loaned it $54 billion to transfer its non-liquid assets into a separate fund.
The fresh capital, equivalent to €3.9 billion, would give the Swiss government a 9.3% stake in the bank, one of the worst-hit by the global financial crisis.
Under the agreement, the Swiss National Bank would lend UBS $54 billion for the separate assets fund, with the remaining $6 billion to come from UBS itself. When the loan is fully repaid, UBS can buy the fund back from the central bank.
UBS had been forced to write down over $42.5 billion worth of assets as well as report consecutive quarters of losses due to the sub-prime crisis.
Switzerland's second-biggest bank Credit Suisse said it did not need state help. But it revealed that it had turned to a group of investors, with the largest participant being a Qatari sovereign wealth funds, for 10 billion francs (€6.5 billion) in new capital.
