"The crisis has substantially weakened many organisations. While the markets have calmed down a bit, they are still fragile," said Patrick Raaflaub, director of the Swiss Financial Market Supervisory Authority (FINMA).

"Fresh shocks could result in further price falls, and even threaten the solvency of some institutions."

Speaking at FINMA’s annual conference, Raaflaub said a recession was in "full swing," and added that "the crisis is far from over."

"The economic slump is causing increased credit defaults, forcing banks to take write-downs and in turn placing a higher claims burden on insurance companies," he said.

Government aid programmes, including the nationalisation of some banks, are "damaging international cooperation in these difficult times" as politicians act for domestic interests, he said.

Raaflaub also said the political and economic climate was "raising doubts about the viability of established areas of business and even entire business models."

AFP / Expatica