UBS ends Credit Suisse dependence on Swiss central bank loan

UBS connected Friday said that it has ended a 9 cardinal Swiss franc ($10.27 billion) nonaccomplishment extortion statement and a 100 cardinal Swiss franc nationalist liquidity backstop that were enactment successful spot by the Swiss authorities erstwhile it took implicit rival Credit Suisse successful March.

UBS said the determination followed a "comprehensive assessment" of Credit Suisse's non-core assets that were covered by the liquidity enactment measures.

"These measures, unneurotic with the involution of UBS, contributed to the stabilization of Credit Suisse and fiscal stableness successful Switzerland and globally," UBS said successful a statement.

Credit Suisse besides afloat repaid the emergency liquidity assistance indebtedness of 50 cardinal Swiss francs to the Swiss National Bank successful March, arsenic Credit Suisse teetered aft a illness successful shareholder and capitalist confidence, UBS confirmed.

"These measures, which were created nether exigency instrumentality to sphere fiscal stability, volition frankincense cease to exist, and the Confederation and taxpayers volition nary longer carnivore immoderate risks arising from these guarantees," the Swiss authorities said successful a connection Friday.

"Furthermore, the Confederation earned receipts of astir CHF 200 cardinal connected the guarantees."

The Swiss Federal Council plans to taxable a measure successful parliament to present a nationalist liquidity backstop (PLB) nether mean law, portion enactment continues connected a "comprehensive reappraisal of the too-big-to-fail regulatory framework."

The 9 cardinal Swiss franc LPA was intended to insure UBS connected losses supra 5 cardinal Swiss francs pursuing the takeover, which was brokered implicit a frenetic play successful March amid talks with the Swiss government, the SNB and the Swiss Financial Market Supervisory Authority.

"After reviewing each assets covered by the LPA since the closing successful June and taking the due just worth adjustments, UBS has concluded that the LPA is nary longer required," UBS said.

"Therefore, UBS has fixed announcement of voluntary termination effectual 11 August 2023. UBS pays a full of CHF 40 cardinal to compensate the Swiss Confederation for the constitution of the LPA."

The 100 cardinal Swiss franc nationalist liability backstop was established connected March 19 by the Swiss authorities and allowed the SNB to supply liquidity enactment to Credit Suisse if needed, underwritten by a national default guarantee.

UBS confirmed connected Friday that each loans drawn nether the PLB were afloat repaid by Credit Suisse by the extremity of May, and that the radical had terminated the PLB statement aft a reappraisal of its backing situation.

"Through 31 July 2023, Credit Suisse expensed a committedness interest and a hazard premium totaling CHF 214 million, including astir CHF 61 cardinal to the SNB and CHF 153 cardinal to the Swiss Confederation," UBS added.