It is highly unusual for a government to impose a halt to bonus payouts, but there has been public backlash against bonus payments at the bank whose rescue was backed by roughly 260 billion Swiss francs (€263bn) of state funding and guarantees.

The decision will affect around 1,000 employees, who will be deprived of approximately 50-60 million Swiss francs with the measures, the council said.

Bonus payments up to the end of 2022 will be cancelled for the executive board, halved for management one level below the board and reduced by 25pc for those two levels below.

Credit Suisse must also report to authorities on whether it is possible to recover paid-out bonuses, added the statement.

For 2023, all bonus payments accruing until completion of the takeover by UBS will be cancelled or reduced for the top three levels of management, said the statement.

Meanwhile, UBS executives sought to assure investors that Switzerland's largest bank can make its unexpected takeover of Swiss rival Credit Suisse work for its shareholders.

While describing the biggest bank rescue since the global financial crisis as a milestone for the industry and a major challenge for the bank, Chairman Colm Kelleher told UBS shareholders it also meant "a new beginning and huge opportunities ahead for the combined bank and for the Swiss financial centre as a whole".

Last month, Swiss authorities announced that UBS would buy Credit Suisse in a shotgun merger to stem further banking turmoil after the smaller lender had come to the brink of collapse.

Mr Kelleher told the bank's shareholder meeting in Basel UBS was confident in its ability to successfully manage Credit Suisse's integration and that the combined bank would remain well capitalised.

"We believe the transaction is financially attractive for UBS shareholders," he said.

The hastily arranged rescue not only angered and unsettled both banks' shareholders, but also many in Switzerland.