"In the last several months, continued speculation about the ultimate value of our subprime holdings -- which remains unknowable -- has been distracting. In our judgment, these writedowns will create maximum clarity on this issue and will have the effect of substantially eliminating speculation," he continued. "Together with the strengthening of our capital base this will allow us to concentrate on sustaining and developing our client businesses."
UBS' colossal writedown comes as securities firms including Merrill Lynch (MER) and Citigroup (C - Get Report) struggle to regain footing as the credit crunch and housing downturn takes a toll on their securities businesses. Both firms, which took billions of losses from CDO writedowns in the third quarter, ousted their CEOs as a result.
Merrill Lynch has since hired former NYSE Euronext (NYX) CEO John Thain to head up the brokerage firm.
Citi is reportedly close to hiring a new CEO. The financial giant's board is expected to pick a new CEO at a board meeting scheduled for Monday and Tuesday, according to The Wall Street Journal.Citi also recently benefitted from a large foreign investment as it battles the recent credit environment. The Abu Dhabi Investment Authority last month invested $7.5 billion in the firm. Shares of UBS most recently rose 96 cents, or 2%, to $51.44 in trading on the New York Stock Exchange.