SUBPRIME TSUNAMI REACHES SWITZERLAND

Switzerland, banking haven of secret accounts, has been hit in a big way by the US subprime crisis.

The largest Swiss bank, UBS (which also has more than 30,000 employees in its US subsidiaries & affiliates), has been forced to write down $ 37 billion in losses from American subprime mortgages. Like many overseas investors who got swamped by the subprime tsunami, UBS did not lend directly to American home buyers, but bought mortgage-backed securities which promised high yields.

Like any amateur investor, UBS (a financial institution dating back to the 18th century) considered the income from the interest more than the safety of the principal,

overlooking the fundamental law of investments:

and Murphy’s Law: If anything can go wrong, it will.

News Source: http://www.nytimes.com/2008/04/06/business/06ubs.html
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