Switzerland's UBS has became the latest banking giant to agree a multi-billion government bail-out.
The firm is transferring $60 billion (£34.7bn) in toxic debts to a fund owned by the Swiss National Bank (SNB). UBS will be putting up $6 billion (£3.5bn) to absorb any losses on the "assets", although the fund will be financed by a $54 billion (£31bn) loan from the SNB.
The move came as rival Credit Suisse announced plans to boost its balance sheet by 10 billion Swiss francs (£5.1bn) without the need of Government aid.
UBS chief executive Marcel Rohner said the move de-risked the bank's balance sheet and "gives comfort in UBS's future".
The rescue will allow UBS to rid itself of unwanted investments hit by the crunch such mortgage-backed bonds, sub-prime debt and bonds backed by student loans.
UBS will have the option of buying back its stake in the fund when the SNB loan - repayable in eight to 12 years - has been settled.
UBS has a strong presence in Birmingham and recently moved into new offices at 10 Colmore Row. It made news in the city in August when it announced that eight wealth management staff from PriceWaterhouseCoopers were joining its Birmingham team.
Earlier this month UBS announced plans to axe 2,000 investment banking jobs - taking total job losses since the credit crunch began to 6,000.
The bank will have an option to buy back its stake when the loan has been repaid, but the immediate cost of the rescue will be an estimated 4 billion Swiss francs (£2bn) hit in the final quarter of the year.
UBS is raising 6 billion Swiss francs (£3bn) to fund its stake in the new entity.
Mr Rohner added: "Our shareholders have borne the losses from this crisis. They now have the certainty that our risks related to these distressed assets have been substantially removed while still participating in the recovery of these assets."
The SNB said the UBS move and Credit Suisse capital raising would "result in a sustainable reduction of strains in the Swiss financial system".
"The stabilisation thus reached will be favourable for the development of the Swiss economy as a whole and is in the interest of the country," it added.
Credit Suisse raised funds from global investors including the Qatar Investment Authority, which pulled out of a bid for supermarket Sainsbury's last year.
Today the bank said it expected a third quarter net loss of 1.3 billion Swiss francs (£665m) after further blows from the credit crunch