Credit turmoil losses set to top $600 billion - UBS

LONDON Feb 29 (Reuters) - Losses from the global credit market crisis will likely top $600 billion, with banks and brokers responsible for more than half of that, UBS said in a note published on Friday.

"Our global banks team estimates total industry losses in this financial crisis should reach north of $600 billion, of which listed banks and brokers should account for 'only' $350 billion," said Geraud Charpin, a credit strategist at UBS in a note entitled: "Wide Spreads - Here To Stay".

Some $160 billion of that $350 billion has already been written off, the note said.

American International Group Inc (AIG.N) on Thursday posted the biggest quarterly loss in its 89-year history -- $5.29 billion -- and missed Wall Street forecasts after being hurt by a writedown of securities exposed to bad mortgage investments.

"AIG's $15 billion writedown is the clearest indication banks are not the only ones to suffer potential losses," Charpin said.

Fears of writedowns have battered equity and credit markets, with rumours of fresh problems emerging almost daily.

As a result, financial credit spreads have sharply underperformed corporate peers and are now at levels where they are pricing in widespread defaults, according to Deutsche Bank.

U.S. Federal Reserve Chairman Ben Bernanke on Thursday warned some small U.S. banks might go under during the current stress, which has been prompted by housing market problems, but that the country's banking system remained solid.

(Reporting by Natalie Harrison and Richard Barley; Editing by David Hulmes)