Like most UBS executives last August, Peter Kurer, the Swiss bank’s general counsel, felt he deserved a holiday. A tumultuous few months had seen an in-house hedge fund forced to close and the bank’s chief executive ejected. Mr Kurer headed off for some lazy sailing in the Mediterranean, confident that the bank had weathered the crisis.

He returned from Corsica to Zurich to find it had only just begun. In a hastily arranged meeting with Marcel Rohner, UBS’s young and earnest new chief executive, Mr Kurer learned the extent of the bank’s predicament. Through its investment banking division, UBS had built up a vast $75bn (€48bn, £37bn) exposure to securities linked to the troubled US housing market. The market for those securities had dried up, leaving UBS with impenetrable assets it was unable to sell. The bank – hitherto regarded as one of the world’s best-run institutions – was facing the gravest crisis in its history.