Swiss officials convene bank crisis committee-paper

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* Committee to discuss possible impact of euro zone debt crisis -paper

* FINMA, SNB, finance ministry represented

* UBS, CS relatively well capitalised but must do more-FINMA

* UBS capital dented by trading scandal

ZURICH, Oct 9 (Reuters) - The Swiss authorities have convened a crisis committee set up after the 2008 government bailout of UBS to discuss the possible impact on the big banks of the euro zone debt crisis, the NZZ am Sonntag newspaper reported on Sunday.

Citing two unnamed sources, the newspaper said the committee had become active as concerns mount that the problems in the euro zone could trigger a new financial crisis that would spread through the banking sector again.

The committee is led by Patrick Raaflaub, director of the FINMA financial markets regulator, and also includes Fritz Zurbruegg, head of the Swiss finance department, as well as central bank vice chairman Thomas Jordan, the paper said.

FINMA was not immediately available for comment on the report.

The paper cited one source as saying that while UBS and Credit Suisse were relatively well capitalised, it was not clear how quickly this capital could be mobilised to cushion the shock of a serious crisis spreading through the system.

The NZZ am Sonntag quoted Raaflaub as declining to comment on the activities of the committee: "A body like the financial crisis committee can only function by definition out of the public eye in such phases."

He also declined to comment on particular measures FINMA was taking towards individual institutions, but urged UBS and Credit Suisse to continue building up capital.

"On an international comparison, the two banks have an above average amount of capital. But they must further improve the quality of their equity capital," he told the newspaper.

"It is no secret that we are encouraging the institutes to reach their objectives faster than is mandatory."

UBS said last week the $2.3 billion it lost in a trading scandal meant its Tier 1 capital ratio would decline slightly at the end of the third quarter from the strong 18.1 percent it reported at the end of the previous quarter.

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Bankers warn of long crisis as rich seek comfort

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HSBC Regional CEO for Global Private Banking in EMEA Alexandre Zeller gestures during the Reuters Global Wealth Management Summit in Geneva October 5, 2011.

Credit: Reuters/Denis Balibouse

By Chris Vellacott

LONDON | Thu Oct 6, 2011 9:08am EDT

LONDON (Reuters) - Private banks are telling their clients financial volatility surrounding Europe's debt crisis will continue for at least a year as more of the continent's rich seek the comfort of household names or state backing when choosing where to bank.

"We are telling (clients) very honestly nobody knows how this is going to evolve and you have to be extremely careful in terms of your exposure," said Alexandre Zeller, head of private banking for Europe, the Middle East and Africa at HSBC.

Pierre de Weck, wealth management head at Deutsche Bank, said during the Reuters Global Wealth Management Summit that clients could expect at least another 18 months of volatility.

"If you're short term oriented and you cannot take pain, reduce risk because we are going to have a bumpy road over the next 18 months until this European sovereign crisis is resolved," he said.

The market volatility since the summer and fears over bank solvency have boosted the kind of institution often shunned during boom times, on account of perceptions they are old fashioned or conservative, bankers said at the summit in Geneva this week

"It has been an accelerating factor in the last few weeks, we have observed a flight to safety. Banks with solid balance sheets, with conservative management and approach to the markets, are seeing significant inflows on a global scale," said Zeller,

"If you look at it more locally, state guaranteed institutions are seeing significant inflows . part-nationalized banks or those with an implicit state guarantee," he said.

James Fleming, head of the international business at Coutts, a division of part nationalized British lender Royal Bank of Scotland, tracing its origins back to 1692, said it had attracted clients in the crisis seeking comfort in its history.

"All the major financial booms and busts in last 320 years, we've navigated our clients through. And I think clients see that," he said.

Yves Mirabaud, managing partner at Swiss bank Mirabaud & Cie, said the woes of large banking groups, most recently an alleged rogue trading scandal at Swiss giant UBS, was boosting the appeal of Switzerland's family-run partnerships.

"I don't know if the fact it is a family business is a selling point ... (But) when you see how the big banks have behaved the past few years I believe that the model is stronger than ever," he said.

(Reporting by Chris Vellacott; Editing by Hans-Juergen Peters)

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