Japan’s large banks could have an aggregate exposure of Y1,000bn ($8.3bn) to the stricken US subprime mortgage market, highlighting the extent to which the problems of low-quality mortgages in the US are affecting investors globally.

According to recent estimates by UBS, which surveyed the top nine banks, the largest exposure to the US subprime sector appears to be through investments in complex financial instruments such as collateralised debt obligations and other securitised products that have subprime loans as their underlying assets.