April 20 (Bloomberg) -- UBS AG Chief Executive Officer Marcel Rohner said the market for U.S. subprime mortgage-related securities may stabilize within half a year after some paper started trading again, Swiss radio DRS reported.

Estimates that the market may become more stable in three to six months are ``reasonable,'' Rohner told DRS in an interview yesterday. The effect of the crisis on other markets, such as consumer credit and commercial real estate, ``will certainly take longer'' to be resolved, he said.

Zurich-based UBS still has about $7 billion in securities which can't be valued properly on the market, out of a total of about $30 billion in mortgage-related assets, he said. While the bank was ``startled'' by the size of its writedowns, lower valuations and signs that trading is taking place again mean the situation is now more manageable, he told DRS.

UBS has written down the value of assets by almost $38 billion since the third quarter of 2007, the most by any bank, after betting on mortgage securities at the peak of the U.S. housing market. Former UBS President Luqman Arnold, speaking in an interview with NZZ am Sonntag, said the bank's balance sheet still contains ``substantial risks'' and reiterated UBS should sell businesses to shore up the wealth management unit.

``I don't see light at the end of the tunnel yet for UBS,'' Arnold told the newspaper. He renewed criticism of Peter Kurer, the designated chairman of UBS, saying he lacks the experience to lead Switzerland's largest bank.

Capital Increase

Chairman Marcel Ospel on April 1 quit after reporting a 12 billion-franc ($11.7 billion) first-quarter loss that prompted UBS to seek 15 billion francs in new capital, on top of 13 billion francs already raised.

The writedowns triggered outflows of client funds in Switzerland, though net inflows abroad more than compensated for that, Rohner told DRS. Swiss tabloid Sonntagsblick reported that UBS last month drafted an internal document to help client advisers deal with potential requests from clients about the safety of their investments.

``It is a paper in case of client inquiries about the safety of the assets they have deposited with us,'' said Axel Langer, a spokesman for UBS, in a telephone interview. ``UBS is one of the best capitalized banks and values a high Tier 1 ratio.''

Shareholders will vote on the capital increase and on Kurer's nomination to the board of directors at a meeting April 23. Arnold said he won't address investors at the meeting and he doesn't want a board seat for his Olivant Advisers Ltd., which holds 1.1 percent of UBS.

Rohner told DRS he's confident shareholders will approve both measures, after speaking to investors holding 40 percent to 50 percent of UBS. Kurer is an ``ideal'' candidate to replace Ospel and was ``crucial'' in helping UBS manage the crisis, he said.

To contact the reporter on this story: Christian Baumgaertel in Zurich at cbaumgaertel@bloomberg.net.

Last Updated: April 20, 2008 11:07 EDT