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Regulator admits UBS may need extra bailout

Switzerland's biggest bank, UBS, could receive another bailout if it faces more difficulties under the global financial crisis, the Federal Banking Commission says.

Daniel Zuberbühler, head of the commission, would not rule out that UBS might need more government aid to survive the crisis, in an interview published in the SonntagsZeitung newspaper on Sunday.

"If you look at the development of the market, it is indeed open whether our package of measures will be sufficient," he said, adding that the government "might have to inject more capital".

He said a $60 billion (SFr68 billion) government bailout agreed last month with UBS had stabilised the bank's liquidity situation, and without which the bank would be in a far worse position.

Around $5 billion of the bailout will be used to bolster the bank's reserves and $54 billion to help UBS dispose of high-risk securities.

Zuberbühler said it was unlikely another bank would take over UBS, as a buyer would have to acquire the entire bailout deal. He ruled out a merger between UBS and Credit Suisse saying such a "monster" would only add to the problems in the investment banking sector.

UBS declined to comment on the issue but a spokesman said the bank was in regular contact with the banking commission.