The Swiss and UK financial authorities on Friday said they have launched formal enforcement proceedings against UBS linked to the regulator's investigation on the bank's oversight duty in a trading scandal that cost Switzerland's largest lender as much as $2.3bn.

The Swiss Financial Market Supervisory Authority, FINMA, and the UK Financial Services Authority, which last year initiated the probe, said they were in close contact. "FINMA has now initiated formal administrative enforcement proceedings against UBS under Swiss law and is in close contact with the FSA, which has also commenced a formal enforcement investigation against UBS," the Swiss regulator said.