Risk management and control

Material reductions were made in exposures to US residential and commercial real estate-related positions and the US reference-linked note (RLN) program. These reductions resulted from UBS's agreement with the Swiss National Bank (SNB) in October, which allowed for the transfer of assets from UBS to a fund owned and controlled by the SNB. As a result of this agreement, UBS's residual positions in these asset classes are no longer considered as concentrations of risk. Refer to the "Changes in 2008" section of this report for an update on the SNB transaction

UBS and the SNB agreed that UBS's student loan auction rate securities (ARS) positions will not be sold to the SNB fund. UBS will continue to manage these positions in conjunction with ARS repurchased from clients. Effective 31 December 2008, student loan ARS are held as loans and receivables and are subject to an impairment assessment. Refer to the "Exposure to auction rate securities" sidebar on page 22 of this report for more information.

In third quarter 2008, UBS reported that it had developed a comprehensive and detailed remediation plan in response to the Swiss Financial Market Supervisory Authority (FINMA; formerly known as the Swiss Federal Banking Commission until 31 December 2008) investigation into the causes of the write-downs. Delivery against this plan remains in line with expectations and is a high priority for UBS