The leading Swiss banking regulator is preparing to investigate how UBS, the country’s biggest bank and the world’s largest wealth manager, ran up vast losses in the global credit crisis.

Alain Bichsel, a spokesman for the Federal Banking Commission, told the Swiss weekly Sonntag.CH that the regulator “will investigate how these enormous writedowns” arose, including “who was responsible for it”.

He said that the commission was also increasing the pressure on the Swiss banking giant to bolster its capital base to overcome the credit crisis quickly. UBS said this month that it had been forced to raise its writedowns to about $14 billion (£7 billion) from a previously reported figure of $10 billion, making it one of the worst-hit victims of the global credit crunch. UBS, which had no immediate comment yesterday, already is the subject of an investigation by the US Securities and Exchange Commission into the mis-selling of sub-prime mortgage debt and the liquidity crisis that followed.

The group’s dismal performance in recent months has forced it to seek external help. Last week UBS was forced to issue a 9 per cent stake to the Government of Singapore Investment Corporation and a second, smaller stake to an investor from the Middle East, thought to be based in Saudi Arabia, to boost its balance sheet.

The latest investigation comes after plans to create a special fund to bail out the structured investment vehicles (SIVs) of the big global banks foundered on Friday night.

Yesterday one Wall Street analyst rejected claims by the three banks that had planned to set up the SIV bailout fund that they could reactivate proposals in the future. Citigroup, JPMorgan and Bank of America said that they had abandoned plans to set up the multibillion-dollar fund but insisted that they could reactivate the plans, should conditions worsen.

Chris Whalen, of Institutional Risk Analytics, said yesterday: “The fund was dead from the outset.” The banks failed to secure enough capital from other institutions to launch the fund.

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