http://www.reuters.com/article/hotStocksNews/idUSL3039464720080130 Wed Jan 30, 2008 7:36am EST By Mike Peacock LONDON (Reuters) - Fresh writeoffs at big European and Japanese banks on Wednesday threw the investor spotlight firmly back onto the credit crunch after days gazing at Societe Generale's stunning losses, which it blames on a junior trader. With the Federal Reserve expected to cut interest rates for the second week running, Swiss bank UBS (UBSN.VX: Quote, Profile, Research) illuminated the depth of the crisis -- unveiling $4 billion in new writedowns tied to the U.S. subprime mortgage meltdown, dragging it deep into the red for the year. UBS has now written off a total of $18.4 billion on the back of a credit crisis that has caused over $100 billion in losses worldwide and forced UBS and others, such as Citigroup (C.N: Quote, Profile, Research) and Merrill Lynch (MER.N: Quote, Profile, Research), to seek emergency capital from abroad. The Swiss bank posted a 12.5 billion Swiss franc ($11.45 billion) loss for the last three months of 2007 and a full-year loss of 4.4 billion francs. Newspaper reports said subprime losses at Japan's Mizuho Financial Group Inc (8411.T: Quote, Profile, Research) may have ballooned to as much as $2.8 billion, potentially forcing the bank to cut its full-year forecast for a second time. Japan's 2nd-largest bank, which reports results on Thursday, may have to inject 200 billion yen ($1.9 billion) or more into its faltering brokerage unit, the Nikkei business daily said. "2007 (was) a horrible year for the banks and the sector is not out of the woods yet," said Franz Wenzel, strategist at AXA Investment Managers in Paris. "Most of the banks will try to put all the write-downs in their 2007 results as they want to clean the balance sheet going forward." Munich Re (MUVGn.DE: Quote, Profile, Research), the world's second-biggest reinsurer, bucked the trend, posting record earnings for 2007 and booking fourth quarter losses of less then 10 million euros on investments exposed to the subprime market. BNP Paribas (BNPP.PA: Quote, Profile, Research), France's biggest listed bank, said it expected fourth quarter net profit would fall 41.8 percent to 1 billion euros ($1.48 billion), as rumors swirled that it may pounce on weakened rival Societe Generale (SOGN.PA: Quote, Profile, Research). On August 9 last year, Paribas helped spark round one of the credit crisis by freezing three of its investment funds as defaults mounted on subprime mortgages, lent to Americans ill-equipped to repay them. Interbank lending virtually dried up as banks realized they did not know which among them were dangerously exposed to the U.S. subprime sector, forcing central banks to pour funds into money markets to keep them oiled, something they are still doing. CUT AND CUT AGAIN Later on Wednesday, the Fed is expected to follow up last week's surprise 75 basis point interest rate cut with a further half point reduction. Financial markets see a three-in-four chance the Fed will lower benchmark overnight rates by a half-percentage point as it seeks to counter the risk of a U.S. recession. But with credit jitters compounded by SocGen's losses of more than $7 billion, which it said last week it had uncovered through massive unauthorized stock trading by one of its employees, markets looked unlikely to be impressed. "This is not going to fundamentally change the view of the U.S. economy. Subsequent macroeconomic data will have to show the economic stimulus measures are indeed making an impact," said Sung Jin-kyung, an analyst at Daishin Securities in Seoul. The shadow of an FBI investigation spread across the subprime crisis on Tuesday. The FBI said it was investigating 14 corporations over possible accounting fraud and insider trading violations in a crackdown on subprime lending. The companies were not named. The FBI said it was cooperating with the Securities and Exchange Commission. Goldman Sachs (GS.N: Quote, Profile, Research), Morgan Stanley (MS.N: Quote, Profile, Research) and Bear Stearns (BSC.N: Quote, Profile, Research) each said government investigators were seeking information from them about their subprime activities. The U.S. House of Representatives overwhelmingly passed a $146 billion economic stimulus package on Tuesday. Parts of the package would allow the Federal Housing Administration and housing finance giants Fannie Mae (FNM.N: Quote, Profile, Research) and Freddie Mac (FRE.N: Quote, Profile, Research) to help prop up the mortgage market.