How a bad bank saved the Swiss economy

When in 2008 the financial crisis arrived, Switzerland's major bank UBS was suddenly threatened with bankruptcy. Thousands of people in Switzerland, who had mortgage loans with UBS, could lose their homes.

With UBS serving almost 1 in 2 Swiss companies, small businesses were threatened to collapse causing people to lose their jobs. Not to mention the more than 26,000 people working for UBS in Switzerland. Account holders were suddenly faced with losing all their savings. So the government had to intervene. Together with the Swiss national bank they created the stability fund, a bad bank, which would absorb all the toxic assets that threatened to bring down UBS.