The Swiss government wants to help the two big banks avoid astronomical fines for mis-selling mortgage-backed securities in the U.S. Part of the argument used by the top diplomat in charge of the mission is the importance of the banks for the financial stability.

The fate of Germany's Deutsche Bank has been carefully analyzed in Bern, the Swiss capital. The U.S. judiciary threatened to impose a fine of $14 billion for its activities in the U.S. mortgage market. With the verdict, all trust in the bank was wiped away and it has become the subject of speculation about its future.

UBS and Credit Suisse (CS) may face a similar fate. But the U.S. judiciary has yet to have its say. Joerg Gasser, the new state secretary for international financial matters, is trying to prevent the worst from happening. He has contacted representatives of the U.S. regulator to lobby for the Swiss big banks, according to a report by «Reuters».

Avoiding Deutsche Scenario

«I emphasized to the officials the importance of the Swiss financial center for the global financial architecture and the systemic relevance of both big Swiss banks and their international importance for financial stability,» Gasser told «Reuters».

German diplomats also are lobbying in the U.S., hoping to receive a more lenient treatment of Deutsche Bank. Their Swiss colleagues would like to prevent the scenario that is threatening to sink Deutsche Bank.

U.S. Not to Be Hurried

Swiss Finance Minister Ueli Maurer yesterday said he had hoped that the U.S. will try to settle the issue before the presidential elections of November 8. «But now we do not have the impression there is a lot of eagerness for this,» he told the press.

Analysts at J.P. Morgan estimated that both Swiss banks face fines of about $2 billion. UBS has put aside $988 million for the mortgage-backed securities investigation, «Reuters» reported. CS by contrast at the end of last year had $1.6 billion set aside to cover for legal cases.

BNP Paribas, the French giant, recently was fined $9 billion for doing business with countries currently affected by U.S. sanctions.