Sept. 25 (Bloomberg) -- The Swiss franc rose against the dollar and euro on concern the U.S. Treasury's $700 billion bailout plan will be delayed or diluted and President George W. Bush said the U.S. may face a ``painful'' recession.

The franc climbed against its 16 most-actively traded counterparts as Bush said late yesterday that the rescue plan is needed to keep the U.S. from slipping into a ``financial panic.'' Swiss government bonds declined as equities advanced.

``People are maintaining safety in currencies like the franc,'' said Jeremy Stretch, a senior strategist in London at Rabobank International, the third-largest Dutch bank. ``Even if stocks are up now, nobody is certain the momentum will be maintained.''

Against the dollar, the franc rose as much as 1.1 percent to 1.0802 and was at 1.0863 at 1:47 p.m. in Zurich, from 1.0916 yesterday. It traded at 1.5929 per euro, from 1.5961.

Bush described how the U.S. became enmeshed in a financial crisis that has frozen credit markets, led to the bankruptcy of an investment bank and pushed the government to nationalize its largest insurer and biggest mortgage-finance companies. Financial institutions around the world have posted $523 billion in losses and writedowns tied to the collapse of the U.S. subprime-mortgage market since the start of last year.

Stocks Gain

The Swiss Market Index of the biggest and most actively traded companies jumped 1 percent, after losing 3.5 percent during the previous three sessions. The Dow Jones Stoxx 600 Index, a regional equity benchmark, rose 0.2 percent.

The franc stayed higher after General Electric Co. cut its profit forecast and suspended its stock buyback, citing ``unprecedented weakness and volatility'' in the financial- services market.

The currency was further supported as the euro interbank offered rate, or Euribor, that banks charge each other for one- month loans climbed today to the highest level since December 2000. The three-month London interbank offered rate, or Libor, for dollars rose the most since 1999.

The yield on the 3 percent government note due January 2018 advanced 4 basis points to 2.82 percent. Yields move inversely to bond prices.

To contact the reporter on this story: Lukanyo Mnyanda in London at lmnyanda@bloomberg.net

Last Updated: September 25, 2008 08:31 EDT