Swiss regulator says UBS, CS pass stress test

02 October 2009 @ 10:40 am EDT

Switzerland's two large banks, UBS and Credit Suisse, could weather a severe deterioration of the economy, Swiss banking regulator FINMA said on Friday, publishing its conclusion from a stress test for the banks.

The U.S. flag is seen in a reflection outside the Swiss bank UBS offices in New York in this August 4, 2009 file photo. The U.S. government and Swiss bank UBS have initialed agreements to settle their tax evasion dispute, a U.S. government attorney said on August 12, 2009, ending weeks of tough negotiations between the two sides.

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The test assumed a deep, worldwide recession, accompanied by a significant deterioration in the finance and property markets, FINMA said.

"The large banks are expected to demonstrate after application of the above mentioned scenario a Tier 1 ratio of above 8 percent," FINMA said.

"Both large banks currently meet FINMA's requirements, which are rigorous by international standards," it said.

"Despite the positive nature of this result, FINMA still expects the large banks to continue in their efforts to both improve their capital base as well as the reduction of their leverage," FINMA said.

(Reporting by Sven Egenter)

Swiss regulator says UBS, CS pass stress test

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