UBS and the Swiss government signed on Friday an agreement to cover up to 9 billion Swiss francs ($10.00 billion) in losses from its emergency takeover of Credit Suisse , the country's largest bank and the government said.
The deal comes with various conditions, including a requirement that UBS keeps its headquarters in Switzerland, the government said in a statement.
The state money will also not come for free however, with UBS having to pay various set up and maintenance fees, as well as premiums on any money drawn. "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 francs," it added.
Valuations of the losses are expected to be made available during the third quarter of 2023, the government said, while their scale is "highly dependent on the actual wind-down of the assets concerned and market developments" it said. The government said the agreement did not mention any federal participation in losses above the total agreed 14 billion francs because such a commitment would require "a legal basis as well a parliamentary approval of a corresponding guarantee credit."Both the authorities and UBS are keen to assure the Swiss public that the takeover, orchestrated with the use of emergency laws and backed by public funds, will not become a burden for the taxpayers.
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