The US sub-prime mortgage crisis has taken more victims as Switzerland's banking regulator warned Thursday that the country's two largest banks could face further write-downs.

Shares in UBS and Credit Suisse fell swiftly yesterday afternoon with UBS, the country's largest bank, dropping 8% and Credit Suisse, Switzerland's second-largest bank, falling 6 per cent.

Daniel Zuberbühler, the director of the Swiss Federal Banking Commission, said: 'People here are talking about the next hotspots, meaning areas that will come under pressure next ... It cannot be ruled out that there could be more [losses] to come,' the Times reported.

USB has now increased its estimated quarterly losses by £2bn to £7bn. UBS's total sub-prime losses of £9.2bn are so far reckoned to be the highest of European banks.

Further reading:

UBS announces further write-down - £9bn to date

UBS takes further $4bn hit on sub-prime