UBS saved by their central bank

UBS is on the verge of collapsing, and they have received special authorization from the SNB to move $60 billion of illiquid assets to a seperate entity and raise CHF 6 billion, among other many things (it is definitely worth reading the full statement):

Up to USD 60 billion in assets to be transferred to new entity, fully owned and controlled by SNB

Based on an agreement with the SNB, UBS will transfer up to USD 60 billion of assets to a newly created fund entity. UBS will capitalize the fund with equity of up to USD 6 billion.

The SNB will finance the fund with a loan of up to USD 54 billion, secured on the assets of the fund. At the time it grants the loan, the SNB will take over control and ownership of the entity by purchasing the equity for a nominal price of USD 1. The loan will be non-recourse to UBS, assuming no change of control of UBS and will be priced at LIBOR plus 250 basis points. It will mature in eight years, but the maturity may be extended to 10 or 12 years.

The USD 6 billion equity will absorb any potential realized losses up to this amount.

Credit Suisse is also raisong CHF 10 billion (no link to provide at this time).

Looks like it is not just the US and UK banking system that are safe and sound, the Swiss one is also in the same category.

I read everywhere that the markets are panicking. But they tend to ignore or downplay the causes, the same way the main stream media fails to report the real causes of this crisis and behaves as if it was a major surprise that was totally unpredictable (forgetting that many people had predicted it, but were all laughed at...). Always remember this quote from John Mills:

“Panics do not destroy capital — they merely reveal the extent to which it has been destroyed by its betrayal into hopelessly unproductive works.” (John Mills - Credit Cycles and the Origin of Commercial Panics)