Page last updated at 17:59 GMT, Thursday, 18 December 2008

Worthless assets used for bonuses

Credit Suisse building in Zurich
Credit Suisse has found something to do with its untradeable assets

Credit Suisse is introducing a new bonus system based on the illiquid assets that were at the heart of the credit crunch.

About 2,000 investment bankers will have their payouts linked to assets with a notional value of 5bn Swiss francs ($4.6bn; 3.1bn).

The leveraged loans and debt based on commercial mortgages in the fund currently have little market value.

The idea is if they develop value in coming years the bankers will get paid.

Huge losses

Credit Suisse confirmed the report about the bonus scheme that appeared on the Swiss news agency SDA.

The bank reported earlier this month that it had lost about 3bn Swiss francs in October and November, mainly from its investment banking division.

It has cut more than 7,000 jobs so far this year.

The illiquid assets in the bonus fund are expected to stay on the bank's balance sheet, although most of their notional value has been written off since the market for them collapsed earlier in the year.

"While the solution we have come up with may not be ideal for everyone, we believe it strikes the appropriate balance among the interests of our employees, shareholders and regulators and and helps position us well for 2009," the bank was reported to have said in a memo to staff.

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