UBS, Credit Suisse Get Urgent Funds
Switzerland extended urgent help Thursday to its storied banking industry as the government acknowledged that even the world’s biggest wealth haven needed protection from the tumult gripping the global financial system.
Less than a week after Europe and the United States coordinated moves to ease the crisis, the Swiss government said it would take a 9 percent stake in UBS, the financial giant that has been among the hardest hit by losses from American subprime mortgage debt, and inject it with 6 billion Swiss francs, in capital. Rebuking UBS for failing to maintain adequate risk controls, regulators also set up a $60 billion fund to absorb toxic assets lingering on its books, a move designed to strengthen its financial and competitive position.
Credit Suisse, the country’s other banking powerhouse, rebuffed an offer of direct government help and said it would raise $8.75 billion on its own from the Qatar Investment Authority and other private backers to shore up its capital base.
Although neither bank is in danger of collapse, with evidence mounting that confidence in UBS’s core wealth management business was eroding, the Swiss National Bank moved quickly.
GOP Donor Is Accused of Overcharging Pentagon
The Democratic chairman of a House investigative committee presented documents to the Pentagon on Thursday charging that a top Republican fundraiser, Harry Sargeant III, has made tens of millions of dollars in profits over the last four years because his contracting company vastly overcharged for deliveries of fuel to U.S. air bases in Iraq.
In a written statement on Thursday, a lawyer for Sargeant, who is the finance chairman of the Florida Republican Party and a major fundraiser for Sen. John McCain’s presidential campaign, called the allegations “deeply disappointing” and asserted that they were not supported by the facts.
The contracting company, called the International Oil Trading Co., or IOTC, was briefly in the news over the summer when a former partner filed a lawsuit against Sargeant in a Florida circuit court.
The former partner, a Jordanian named Mohammad al-Saleh, is a brother-in-law of the King of Jordan. The court papers laid out his assertion that he obtained special governmental authorizations for the company to transport the fuel through Jordan and was then unlawfully forced out by Sargeant, who strongly disputed those allegations.
EPA Toughens Standard on Lead Emissions
The Environmental Protection Agency on Thursday set stringent new standards for airborne lead particles, following the recommendations of its science advisers and cutting the maximum allowable concentrations to a tenth of the previous standard. It was the first change in federal lead standards in three decades.
But the cleanup of areas with excessive lead levels is not required for more than eight years, and the system of monitors that detect the toxic contaminant is frayed. Currently, 133 monitors are in operation nationwide, down from about 800 in 1980, an EPA spokeswoman, Cathy Milbourn, said. The agency is working on rebuilding this network, to include more than 300 monitors, Milbourn said.
The new standards set the limits for exposure at 0.15 micrograms per cubic meter of air, down from 1.5 micrograms, and well within the outer limit of 0.2 micrograms recommended by the advisers.