International credit crisis has left its deepest marks yet on the European banking system

International credit crisis has left its deepest marks yet on the European banking system. Two mega-banks, Swiss bank UBS and Germany's Deutsche Bank, announced fresh asset write-downs amounting to billions of euros.Germany's biggest bank announced Tuesday, April 1, that it will write down an estimated 2.5 billion euros ($3.9 billion) in its first quarter. Deutsche Bank blamed bad loans in the housing sector and noted that conditions in international financial markets had become "significantly more challenging" in recent weeks.The announcement did not come as a complete surprise. Deutsche Bank had warned last week it might miss 2008 earning target.UBS is hoping for a sunnier futureBut Deutsche Bank's bad news was dwarfed by that of Swiss banking giant UBS, which announced it will write down 12 billion euros for the first three months of 2008.
"Deutsche Bank took advantage of the timing, coming on the heels of UBS so as not to have to rattle the market a second time," said Heino Ruland, analyst at FrankfurtFinanz told Reuters.With Tuesday's announcement, USB had the dubious distinction of being the bank which has taken the worst hit from the US subprime mortgage crisis. UBS Chairman Marcel Ospel, seen by many as the man responsible for leading the bank into disastrous US subprime mortgages, announced his resignation Tuesday."I ultimately take responsibility for the bank's situation," Ospel said in a statement.UBS's new write-downs come on top of $18.4 billion the bank had written down in 2007, bringing the bank's total write-downs to $37.4 billion. USB will turn to its shareholders to raise another 15 billion Swiss francs (9.5 billion euros, $14.8 billion) to shore up its financial base.