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Via EDGAR and fax

Ms. Jessica Barberich

    Assistant Chief Accountant

    Division of Corporation Finance

    United States Securities and Exchange Commission

    100 F Street, N.E.

    Washington, D.C. 20549

UBS AG

Postfach

CH-8098 Zürich

Tel. +41-44-234 11 11

www.ubs.com

October 23, 2009

UBS AG

Form 20-F for the fiscal year ended December 31, 2008

Filed March 11, 2009

File Number 001-15060

Dear Ms. Barberich:

We are pleased to submit our responses to the comment letter dated September 23, 2009 (the “Comment
Letter”) from the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”)
relating to the annual report on Form 20-F for the fiscal year ended December 31, 2008 (the “2008
Form 20-F”) of UBS AG (“UBS” or the “Company”). For your convenience, we have set out the text of
each comment contained in the Comment Letter, followed by our response. As you requested, we have
included supplemental information where applicable.

Comment 1

Off-Balance Sheet, page 47

Support to non-consolidated investment funds, page 50

You disclose that in 2008, as a result of the financial markets crisis which caused declining asset
values, market illiquidity and de-leveraging by investors, you supported several non-consolidated
investment funds that you manage in your wealth and asset management businesses. Please tell us if
you reassessed your treatment of these funds for consolidation as a result of the additional
support and provide us with the results of your reassessments, if applicable.

Yes, UBS reassessed the consolidation status of funds to which it provided support. Such
reassessments took into account the specific facts and circumstances at the time support was
provided, legal considerations, the nature of the support, the risk and reward profile after the
support, the ability of UBS to control the fund as well as the probability of recurrence of such
support. As a result of those reassessments, one fund was consolidated. As for the other funds,
UBS has not absorbed or committed to absorb the majority of the risks and therefore has not
consolidated them.

Comment 2

Credit Risk, page 134

Past due but not impaired loans, page 145

UBS AG

Form 20-F for the fiscal year ended

December 31, 2008

Filed March 11, 2009

File Number 001-15060

October 23, 2009

Page 2 of 17

We note that past due but not impaired loans that are 61-90 days old and over 90 days old increased
significantly from year to year. Please discuss this trend and tell us in more detail how you
determined that these loans were not impaired.

As background information, UBS distinguishes between loans that are “past due” and “impaired.” A
loan is considered to be past due when a significant contractual payment has been missed. UBS
considers a loan as impaired if it is probable that it will not fully recover all contractual
payments due under the loan as a result of the borrower’s inability to meet its obligations.

Past due loans are identified and assessed by credit monitoring teams for impairment. That
assessment includes an evaluation of a debtor’s ability to repay the loan, including an evaluation
of collateral that can be liquidated by UBS to settle outstanding loan amounts. If based on that
assessment, UBS concludes that the loan is impaired, a valuation allowance is recognized. Loans in
the 61—90 days and over-90 days categories were assessed for impairment according to that
procedure and were not assessed as impaired at 31 December 2008.

The year-over-year increases in the 61—90 days and over-90 days categories were driven by
macro-economic factors, namely, the worsening credit environment in 2008 following the prolonged
deterioration in global financial markets and recessionary pressures in the international and the
Swiss domestic economies. The increase in the 61-90 days category primarily related to the lombard
lending portfolio (loans secured by marketable securities). The increase in the over-90 days
category largely related to three corporate loans from the Swiss domestic lending portfolio, which
accounted for more than 70 percent of the increase.

Approximately 85 percent of the loans in the 61-90 and over-90 days categories were subsequently
repaid in full or became performing loans in the first six months of 2009. As of June 30, 2009,
approximately 10 percent of the loans were still considered past due and continue to be monitored
but have not been assessed as impaired. The remaining 5 percent were reclassified as impaired based
on events occurring after December 31, 2008.

Comment 3

Note 23 Derivative instruments and hedge accounting, page 312

We note your disclosure regarding your credit derivatives in Note 23. Concerning your involvement

as a seller of credit derivatives, please tell us, and disclose the following information in future

filings for your credit default swaps and total rate of return swaps:

    •

    Discuss the types of credit events or circumstances that would require you to perform under
the credit derivatives and the current status of the payment/performance risk of the credit
derivatives;

    •

    Discuss the nature of (1) any recourse provisions that would enable you to recover from
third parties any of the amounts paid under the credit derivatives and (2) any assets held
either as collateral or by third parties that, upon the occurrence of any specified triggering
event or condition under the credit derivative, you can obtain and liquidate to recover all or
a portion of the amounts paid under the credit derivative. Please indicate, if estimable, the
approximate extent to which the proceeds from liquidation of those assets would be expected to
cover the maximum potential amount of future payments under the credit derivative. In your
estimate of possible recoveries, please tell us the effect of purchased credit protection with
identical underlying(s).

Types of Credit Events

Substantially all of UBS’s credit default swaps (“CDS”) and total rate of return swaps (“TRS”) are
traded under an International Swap and Derivatives Association (“ISDA”) master trading agreement
(“MTA”) between UBS and its counterparty. UBS’s CDS trades are also documented using industry
standard forms of documentation published by ISDA or equivalent terms documented in a bespoke
(i.e., tailored) agreement. Those forms and agreements use standardized terms that form the basis
for market

UBS AG

Form 20-F for the fiscal year ended

December 31, 2008

Filed March 11, 2009

File Number 001-15060

October 23, 2009

Page 3 of 17

conventions related to the types of credit events that would trigger performance (i.e., payment)
under a CDS.

The types of credit events that would require UBS to perform under a CDS contract are subject to
agreement between the parties at the time of the transaction, but nearly all transactions are
traded using the credit events that are applicable under certain market conventions based on the
type of reference entity to which the transaction relates. For North American and European
corporate reference entities, the applicable credit events by market convention are “bankruptcy,”
“failure to pay” and, in some cases, “restructuring.” For other entities, including most emerging
market reference entities, the applicable credit events by market convention also include
“obligation acceleration” and “repudiation/moratorium” in addition to “bankruptcy,” “failure to
pay” and “restructuring” (although “bankruptcy” is generally not included for sovereign reference
entities).

Payment/Performance Risk

UBS is an active dealer in fixed income instruments and CDS and related products with respect to a
large number of issuers. As a general matter, risk to the relevant issuers arising from both fixed
income instruments and CDS and related products are reviewed and risk-managed on a net exposure
basis (i.e. taking into account all exposures to a particular issuer arising from both fixed income
instruments and CDS and related products).

The substantial majority of UBS’s derivatives trading (including CDS and TRS) is on a
collateralized basis. This means that credit exposures arising from derivatives activities with
counterparties are either closed out in full or reduced to nominal levels on a regular basis
(typically daily) by the use of collateral. Derivatives trading with counterparties with higher
credit ratings (for example, a large bank or broker-dealer) is typically under an ISDA MTA and
credit exposures to those counterparties from CDS, together with exposures from other OTC
derivatives, are netted and included in the calculation of the collateral required to be posted
under the credit support annex of the ISDA MTA. Trading with lower rated counterparties (for
example, hedge funds) would also generally require an initial margin to be posted by the
counterparty.

UBS therefore receives collateral from or posts collateral to its counterparties based on its open
net receivable or net payable from its OTC derivatives activities. Under the terms of the ISDA MTA
and like forms used by UBS, that collateral (which generally takes the form of cash or highly
liquid fixed income securities, e.g., securities issued by the US Treasury) is available to cover
any amounts due under those derivative contracts. Consequently, counterparty credit risk
associated with CDS (and other OTC derivatives including TRS) is generally low as the collateral
received by UBS (when it has a net receivable) or posted by UBS to a counterparty (when UBS has a
net payable) generally would be expected to minimize such risk.

As of June 30, 2009, approximately 98 percent of UBS’s total gross notional CDS (i.e., the
aggregate of bought and sold notional) was traded on a collateralized basis. The tables below show
a more detailed breakdown of the proportion of UBS’s CDS trading portfolio that is collateralized
and uncollateralized by total notional exposure and positive and negative replacement values (i.e.,
derivative assets and derivative liabilities with positive and negative fair values, respectively).
CDS trading with monoline insurers was largely uncollateralized which is reflected in the
differences in positive replacement values between the tables. UBS has previously disclosed its
exposures and losses related to monoline insurers as a risk concentration. The related quantitative
disclosures for those CDS as of December 31, 2008, and June 30, 2009, can be found, respectively,
on page 125 of 2008 Form 20-F and page 44 of our 2Q09 quarterly report.

CDS Portfolio Inc. Monolines (Split by Collateralised and Uncollateralised CDS Providers)

    % of Postive

    % of Negative

    Counteparty Type

    % of Total Notional

    Replacement Value

    Replacement Value

    Collateralised

    98
    %

    84
    %

    99
    %

    Uncollateralised

    2
    %

    16
    %

    1
    %

UBS AG

Form 20-F for the fiscal year ended

December 31, 2008

Filed March 11, 2009

File Number 001-15060

October 23, 2009

Page 4 of 17

CDS Portfolio Exc. Monolines (Split by Collateralised and Uncollateralised CDS Providers)

    % of Postive

    % of Negative

    Counteparty Type

    % of Total Notional

    Replacement Value

    Replacement Value

    Collateralised

    99
    %

    94
    %

    99
    %

    Uncollateralised

    1
    %

    6
    %

    1
    %

Settlement risk (including payment risk) of CDS has been mitigated to some extent by the
development of a market wide credit event auction process which has resulted in a widespread shift
to the cash settlement of CDS following a credit event on a reference entity. Almost 75 percent of
settlements on CDS that UBS had traded in 2008 and first half of 2009 were settled by a credit
event auction. UBS has not experienced any significant losses from failed settlements on CDS
contracts in 2008 or the first six months of 2009.

Recourse Provisions

As noted previously, UBS uses standardized agreements and forms as the basis for its CDS and TRS
contracts. Those agreements and forms do not contain recourse provisions that would enable UBS to
recover from third parties any amounts paid out by UBS (i.e., this is the case if a credit event
occurs and UBS is required to make payment under a CDS).

Assets Held as Collateral or by Third Parties

See discussion above on collateral in Payment/Performance Risk section.

Disclosures in Future Filings

In Comment Nos. 3, 4 and 5 the Staff has asked UBS to consider disclosing in future filings a
variety of information regarding credit derivatives. We note that peer banks subject to US GAAP
are providing more information regarding credit derivatives in response to new detailed disclosure
requirements becoming effective for their 2009 external financial reports. IFRS 7, Financial
Instruments: Disclosures, does not contain similar detailed disclosure requirements for credit
derivatives; however, voluntarily providing additional information might be beneficial. We expect
to disclose in future filings high-level textual information concerning the points above.

Comment 4

Note 23 Derivative instruments and hedge accounting, page 312

For credit protection sold and credit protection purchased, please tell us and consider disclosing
in future filings the extent to which the derivative activity was for the following purposes:

    •

    Providing default risk protection to offset credit exposure to your holdings of the related
reference entity’s debt in your loan portfolio, investment portfolio, or loan commitments
outstanding;

    •

    Creating new credit exposure for your own trading purposes;

    •

    Reflecting credit exposures taken for the benefit of your clients; and

    •

    Providing an offset to credit exposure taken for the benefit of clients.

Also, please discuss your overall strategies employed in your credit derivatives portfolio as well
as any changes in those strategies during the periods presented.

UBS actively utilizes CDS to economically hedge specific counterparty credit risks in its banking
book loan portfolios (including loan commitments) with the aim of reducing concentrations in
individual names, sectors or specific portfolios. As of June 30, 2009, UBS had purchased
approximately CHF 46.3 billion of CDS hedges against its banking book loan exposures of CHF 93.6
billion. In addition, UBS actively utilizes CDS to economically hedge specific counterparty credit
risks in its OTC derivatives portfolios.

UBS AG

Form 20-F for the fiscal year ended

December 31, 2008

Filed March 11, 2009

File Number 001-15060

October 23, 2009

Page 5 of 17

UBS is an active dealer in fixed income instruments and CDS and related products with respect to a
large number of securities issuers. The primary purpose of those activities is for the benefit of
UBS’s clients (market-making) and to a lesser extent creating new credit exposures taken for UBS’s
own trading purposes (proprietary trading).

Market-making activity consists of buying and selling single-name CDS, index CDS, loan CDS and
related referenced cash instruments to facilitate client trading activity. Proprietary trading
consists of trading in single-name CDS, index CDS and loan CDS to capitalize on pricing
discrepancies between various credit instruments (bonds, loans and equities) across investment
grade, high-yield and emerging markets.

As a general matter, risk to the relevant issuers arising from both fixed income instruments and
CDS and related products are reviewed and risk-managed on a net exposure basis (i.e. taking into
account all exposures to a particular issuer arising from both fixed income instruments and CDS and
related products) across market-making and proprietary trading activities.

The only significant change in UBS’s strategies with respect to CDS trading is the reduction in
scope and scale of the firm’s structured credit, proprietary credit and asset securitization
(including synthetic