Document Type

Case Study

Case Series

Resolution and Restructuring

JEL Codes

G01, G29


UBS incurred write-downs totaling USD 50 billion during the Global Financial Crisis, mostly on exposures to securities linked to US subprime mortgages. On October 16, 2008, the Swiss National Bank (SNB) announced that it would set up a special purpose vehicle, StabFund, to purchase up to USD 60 billion of troubled assets from UBS. The Swiss government also subscribed to 6 billion Swiss francs (CHF; USD 5.3 billion) of mandatory convertible notes (MCNs) issued by UBS. Between December 2008 and April 2009, UBS transferred USD 38.7 billion in assets and contingent liabilities to StabFund in three tranches. In August 2009, the government sold its entire stake in UBS for CHF 7.2 billion. The SNB and UBS jointly managed and wound down the portfolio transferred to StabFund and achieved their objective of stabilizing the Swiss financial system and UBS. In November 2013, after StabFund fully repaid the SNB loan, UBS paid USD 3.8 billion to the SNB to purchase StabFund’s entire equity. The SNB also gained interest income of USD 1.6 billion over the term of the loan.