New UBS Writedown Dents Credibility

The Swiss bank's latest hit takes its total subprime losses to $18 billionand counting. Will its wealth management business suffer?

The $4 billion writedown announced by UBS (UBS) on Jan. 30 doesn't come as a huge surprise. As far as is known, UBS has the largest exposure among European banks to U.S. subprime mortgages and collateralized debt obligations (CDOs), and the value of these securities is continuing to deteriorate—hence the need to acknowledge further losses. Other banks also are expected to take further hits.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.