A press release has been issued by Dr. Alain Bischel, spokesman for the Federal Banking Commission of Switzerland on the security of the nation's banks.

Bischel believes that the correct procedures were applied in the lead up to the global economic crisis and the effect of the crisis has been limited upon the Swiss financial sector. He said: “The condition of the other banks in Switzerland is generally sound. Despite the impact of global market events on Switzerland, the Swiss banks remain strong. They enjoy a solid capital base and sufficient liquidity.”

The Swiss Federal Banking Commission is particularly satisfied with the stability of the two largest banking groups UBS and Credit Suisse, saying: “The SFBC has closely followed the developments around the two large banking groups, for more than a year and, whenever necessary, has taken appropriate supervisory measures. Both large banks at the present time satisfy all supervisory requirements with regards to capital and liquidity. Customer deposits remain safe.”

He added: “The growing intensity of the global financial crisis has led to deterioration in credit market liquidity. Government actions abroad - including capital injections into banks, guarantees on interbank loans, and insurance on customer deposits - have made it more difficult for banks to obtain liquidity funding.”

"Against this backdrop, the Federal Council, SNB and SFBC have decided to implement a set of prearranged measures to strengthen the Swiss Financial System. One such measure is to create a special purpose company that will purchase illiquid bank assets and liquidate those assets in an orderly way. In addition, separate measures have been taken to strengthen the capital base of the large banks. This forward-looking package of measures has been taken at the appropriate moment and is offered to both large banking groups.”

The two banks have taken different action in response to current events. UBS plans to use the measures suggested by the SFBC to substantially reduce its risk positions. The SFBC commented that “the risk reduction, as well as the strengthening of the capital base, will contribute significantly to the sustainability and stability of the bank. UBS has a solid capital base.”

Credit Suisse has opted not to participate in these measures; instead the bank has decided to approach the market to raise a significant amount of capital. The SFBC responded that: “Credit Suisse’s decision to raise capital is partly motivated by its desire to bring their capital base into line with the new, stricter capital requirements for large banking groups, which have been developed by the SFBC in coordination with the SNB which are set to be implemented over the next few years."

The spokesman added: “The SFBC has established a common understanding with Credit Suisse over the principal elements of the new capital regime for large banking groups, which will be decided by the supervisory authority. With the measures announced today, Credit Suisse currently exceeds the new risk-weighted capital target for 2013 and the minimum leverage ratio requirement."

A similar agreement is expected to be reached with UBS within the next few weeks.