Credit Suisse (CS) May Need More Capital as Eurozone Crisis Escalates

Shares of Credit Suisse (NYSE: CS) are under heavy pressure after the The Swiss National Bank (SNB) urged the bank to raise capital to shield itself from the crisis in the euruzone. The SNB wrote in its annual financial stability report that given the low starting point and risks in the environment, it is essential that the bank expand its loss-absorbing capital this year.

"Apart from the planned reduction of risk, these improvements can also be achieved in other ways, such as by suspending dividend payments, or even by raising capital on the market through share issuance," the SNB said.

UBS (NYSE: UBS) was also cautioned against paying cash out to shareholders. The leverage at UBS and Credit Suisse is "very high", noted the SNB. Both companies face "substantial losses" due to counterparty links with other European banks in the event of bank failures.

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