Banks’ valuations of their collateralised debt obligations holdings, one of the financial instruments worst hit by the credit crunch, vary far more than previously thought according to independent research provider CreditSights.

The differing valuations, combined with a further slide in sub-prime assets this year, could potentially lead to first quarter CDO writedowns of up to $3bn (€1.9bn) for several banks and as much as €6bn for UBS, according to CreditSights analysts Simon Adamson and John Raymond in a report published late yesterday.