"Even though they met the standard capital requirements, they did this painful raise of new capital from their shareholders in order to be able to show again this strong capital base," Ammann said.

UBS's timing was good, too, because it would have been more difficult if not impossible to raise the capital had the bank waited until later this year when financial conditions were worse, he added.

Hans Geiger, a retired banking professor at Zurich University, said UBS was a "big headache" for Switzerland.

"They're so big. Their total assets are about five times Swiss GDP, which of course is enormous."

The big banks are much bigger than other Swiss banks. The two banks alone have 67 percent of the balance sheet total of 3.5 trillion francs (US$3.1 trillion) for all banks in Switzerland.

Economics Minister Doris Leuthard said Thursday that the government had contingency plans to prevent the collapse of either of the two big banks, who together employ almost half of the 109,000 people who work for banks in Switzerland, a country of 7.5 million.

Despite global problems the staff numbers were still rising at last count earlier this year.

Swiss newspapers have been questioning the government's slowness to increase bank deposit insurance, because the 30,000 francs (US$27,000) per client is low by international standards.

Government officials have said they are looking into it, but place less emphasis on that than on the need to make sure banks have enough money to keep credit going.

"That was a cool reaction and a realistic one," said Geiger. He said he was shocked when German Chancellor Angela Merkel said the German state guarantees all the country's banks.

This seemed to send a signal that all the banks were in trouble, "which I'm almost sure is not the case," he said.

Geiger said he agrees with the Swiss government that the problem is between banks, not customer confidence.

"There are no depositor queues in front of the banks here," he said. "The problem is the relationship between the banks. The interbank market has dried up or broken down completely."

Geiger said by one measure the large banks are well capitalized, but like other international banks they are more reliant on loans than other Swiss banks.

"Otherwise I think the banks are healthy, the economy is healthy. I just don't see any reason for panic."

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