Ubs will pay $885 million in a settlement with a US regulator over allegations it misrepresented mortgage-backed bonds during the housing bubble, paving the way for billions more to be paid by other banks.

The Federal Housing Finance Agency said yesterday UBS will pay $415 million and $470 million respectively to Fannie Mae and Freddie Mac to resolve claims related to securities sold to the companies between 2004 and 2007.

UBS is just one of 18 banks the FHFA pursued.