UBS Dismiss Write-down Rumours
by Kay Murchie
UBS, the Swiss investment bank, is denying rumours that it was preparing to take a further write-down of 4.5 billion Swiss Francs in early 2008, indicating that to do so would breach accounting policies and there were currently no indications of any further problems for their investment holdings.
However, the bank added that market movements are volatile and there may be further write-downs in the future depending on what happens between now and then. The company shrugged off rumours that their next write-down could be as early as January 2008.
One of the major points of argument forwarded by UBS in favour of their position is that to delay news of a write-down would be contrary to accounting principles, which require disclosure immediately upon revelation.
The company said if we know of such a write-down, we are bound by our accounting principles to announce it immediately as we did with the $10 billion writedown that we announced last week. The $10 billion write-down was as a result of the loss in its sub-prime investment portfolios.
JP Morgan, rival investment bank, was the source of the rumours according to Swiss publication Sonntag.
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