UBS Uses Markets, Not Goverment, To Deal With Sub-Prime Crisis

Instead of sucking off the blood of taxpayers, Swiss banking giant UBS is weathering a financial crisis wrought by investing in bad mortgages by aggressively selling off its U.S. commercial and residential mortgage-related assets. Reports Forbes:

UBS has been more aggressive about marking down its assets than many of the banks for whom the rescue package is intended, making it easier for the Swiss bank to sell them on. UBS will probably also struggle to find any buyers for more toxic assets such as its high risk collateralized-debt obligations.

UBS, whose troubles began in May 2007 when it shut its Dillon Read hedge fund, has been one of the heaviest-hit victims of the credit crunch. But it has acted swiftly to get back on track, pumping shareholders and two sovereign wealth funds for billions in new capital. In August, it announced that it would be abandoning its “universal bank” model, slashing the balance sheet of its securities division, and slicing itself into three divisions to curb the outflow of money from its core wealth management business in Switzerland.

However:

UBS will probably also struggle to find any buyers for more toxic assets such as its high risk collateralized-debt obligations.

Capitalism, you say? That sounds like an intriguing concept. We should get some of that going on over here.

UBS Gets An Alternative Bailout [Forbes] (Photo: On Stage Lighting)