Second Swiss bank loses billions

Switzerland's Credit Suisse has joined the list of banks revealing disastrous results for 2008 after it reported losses of $7.1 billion (8.2 billion Swiss francs).

The country's second largest bank lost 6 billion Swiss francs in the last quarter of the year alone, the bank said Wednesday. The figures compare with a $6.7 billion profit for 2007.

The bank's losses were revealed a day after UBS posted a worse than expected loss of nearly $17 billion -- the largest ever by a Swiss group -- and announced 1,600 new job cuts.

Credit Suisse's chief executive Brady Dougan said the firm was working hard to remove risk from the business and had made a strong start to this year.

"While our full-year results are clearly disappointing, we entered 2009 with a very strong capital position, a robust business model, a clear strategy and well-positioned businesses," Dougan said.

"We have positioned our businesses to be less susceptible to negative market trends if they persist in the coming months and to prosper when markets recover."

Last year Credit Suisse cut more than 7,000 jobs, mainly from its investment banking division.

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• UBS posts record loss, cuts 1,600 jobs

The Swiss government said it would pour 6 billion francs into banking giant UBS in October. UBS announced at the time that it would transfer up to $60 billion of illiquid assets off its books and onto those of the Swiss National Bank. Illiquid assets are ones that cannot be sold easily, or without substantial loss.

But Credit Suisse declined to take government money, instead raising approximately 10 billion francs ($8.26 billion) from from a group of international investors led by the Qatar Investment Authority.

The bank said it decided not to participate in the government's bailout plan because it had a low level of affected assets in its portfolio and good access to capital markets

BI Says Bank Crimes Hard to Handle

Bank Indonesia (BI) stated that it has modified its monitoring method to improve bank controlling system. However, it is difficult to put the brakes on the criminal methods that are rapidly altering.

According to BI Deputy Governor Siti Fadjriah, BI is now developing risk-based approach. With the approach, both domestic and global changes will affect banks' risk. "It includes detecting quite unexpected characters of owners and bank management," she said on Tuesday, Feb 10.

In the past, she said, BI applied compliance approach. The method had only enabled the central bank to recognize past issues. As a result, it will be left behind if a manipulation is committed.

BI implements on-site and off-site supervision in monitoring banks. Inside supervision is carried out every year. BI can also penetrate into a bank if it detects risk-alleged matters. "The off-site supervision will be applied if we notice an odd activity. Every time we send out a supervisor, it can be done. We do not have to place a supervisor in a bank because we can be there at any time," she said.

To anticipate bank crimes, BI will duplicate supervision especially concerning supervisors' competency. The problem has been on the supervisors' unfamiliarity with the business. Supervisors' knowledge on the business should be improved.

The House of Representatives (DPR) had earlier commented on BI's monitoring system. Member of DPR Commission XI, Melchias Markus Mekeng, for instance, said BI has applied weak monitoring system.