UBS, the Swiss bank, was accused on Wednesday of "serious failure" by Luxembourg's financial regulator over its custodianship of a $1.4bn (€1.1bn) fund that funnelled money into Bernard Madoff's alleged $50bn "Ponzi" scheme.

The regulator said the "poor execution of [the bank’s] due diligence obligations constitute a serious failure of its surveillance role as a depositary bank".