Swiss parliament asks government to consider UBS lawsuit

SWITZERLAND - The Swiss parliament has passed a motion demanding a government-led push for transparency at the bank UBS, while also considering legal action via the AHV fund or the Publica Pensionskasse.

Following a similar motion in the smaller chamber, the Nationalrat of the Swiss parliament has overwhelmingly voted in favour of a motion brought forward by the parliamentary audit commission.

There were 106 votes in favour of the proposal while 45 opposed - most of them from the ruling party.

The audit commission is lobbying the government to only allow UBS to buy back illiquid assets currently held by the Swiss national bank (SNB) once all open questions regarding dealings in the US-market before and during the financial crisis are answered.

Further, parliament called on the government to consider legal action against the UBS regarding losses sustained through subprime investments. The government had previously said it was reluctant to do so.

One possible way would be through public funds such as the first-pillar AHV fund or the public pension fund Publica, both of which are shareholders in UBS.

However, during the parliamentary session, finance minister Eveline Widmer-Schlumpf pointed out that the motion could not legally be implemented, as the government had no authority over the national bank regarding such matters.

She added that the SNB and UBS have agreed there is currently no need to buy back the $38.7bn (€28bn) in "toxic papers" and noted that the SNB would only agree to a sale once it was certain this step would not threaten the bank's stability.

Regarding legal action against UBS, Widmer-Schlumpf acknowledged that the "question of a possible lawsuit arises", as shareholders have declined to discharge for UBS's board for the year 2007.

"There is also time to file such a lawsuit, and the government has asked UBS again to look into whether legal action should be taken," she said.

But she stressed that the government was in no position to force public funds or anyone else to start legal actions against the UBS.