UBS, Europe's largest bank, said yesterday it had written off 950 million Swiss francs (£363.4 million) on its investment in Long-Term Capital Management, the US hedge fund rescued by 15 international banks, including the Swiss bank itself.

UBS's charge, which will lead to an after-tax loss of up to Sfr1 billion in the third quarter, relates to its equity investment in Long-Term Capital Management rather than its credit exposure.

But its announcement is likely to increase pressure on banks from national regulators and stock markets to disclose their potential exposure to Long-Term Capital Management and other hedge funds.

Under the rescue agreement, 11 banks - Goldman Sachs, Merrill Lynch, Morgan Stanley Dean Witter, Travelers, UBS, Credit Suisse First Boston, Barclays, Deutsche Morgan Grenfell, Chase Manhattan, BT Alex Brown and J.P. Morgan - each agreed to put up $300 million, while Societe Generale and Lehman Brothers contributed $125 million and Paribas and Credit Agricole $100 million.

People involved in the talks at the Federal Reserve Bank of New York said that, while the exposure of some of these banks was sizeable - perhaps as much as $800 million - some had relatively small exposure, in particular some of the non-US banks.

They participated to be "neighbourly", according to one bank. Senior bankers in New York said they were reviewing their strategies for extending credit to hedge funds. One banker said investment banks would have to be "more disciplined" in their dealings with hedge funds, which have become valuable clients.

However, many banks said that their exposure to hedge funds, including Long-Term Capital Management, was partly, largely or fully covered by collateral, leaving a confused picture of the extent of their exposure.