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Last Updated: Monday, 24 December 2007, 08:28 GMT
UBS to face credit crunch probe
Sign outside UBS offices in New York
UBS has been among the worst-hit of the world's banks
Switzerland's Federal Banking Commission (EBK) is to investigate how UBS became one of the banking sector's worst victims of the credit crunch.

The Swiss bank has been forced to write off about $14bn (7bn) because it owned debt linked to US mortgages.

EBK spokesman Alain Bichsel told a number of newspapers that there would be an investigation into the losses once the current crisis had eased.

The regulator welcomed UBS's actions to strengthen its position so far.

The world's biggest wealth manager has sold new shares to Singapore and Saudi Arabia, scrapped this year's dividend and sold some shares held by the bank.

Many banks have been hit by their exposure to securities based on US mortgage debt.

Record default levels in the US have cast doubt on the value of the instruments, which were originally packaged as relatively safe investments.

"We will investigate how these enormous writedowns could arise," Mr Bichsel told the Swiss Sonntagszeitung newspaper.

"One aspect of that is who was responsible for it."

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