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Swiss government says it has reached agreement with UBS on loss guarantees

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ZURICH (Reuters) – The Swiss government has signed an agreement with UBS to cover up to 9 billion Swiss francs ($10.01 billion) in losses from its emergency takeover of Credit Suisse, the finance ministry said on Friday.

“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.

“The guarantee will only come into effect if the losses from the liquidation of these assets exceed 5 billion Swiss francs and is limited to a total of 9 billion,” it added.

That reflects the terms of the takeover orchestrated by Swiss authorities in March to ease Credit Suisse’s rescue, under which UBS committed to cover the first 5 billion francs in potential losses while the government would shoulder up to 9 billion francs on top of that.

($1 = 0.8990 Swiss francs)

(Reporting by John Revill; Editing by Tomasz Janowski)

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