Credit Suisse CEO Brady Dougan is staking his reputation on the fact that his firm won't need to issue additional stock to beef up it's balance sheet. If he's wrong, some say, he will be forced to resign.
The Financial Times reports that Dougan's 'future (as CEO)...has come under scrutiny amid increasing market pressure (on the bank) to bolster its comparitively weak capital base'.
Switzerland's central bank (SNB) took the unusual step last week of publicly urging Credit Suisse to improve its capital strength by halting dividends or issuing shares to raise cash to shield it from the risk of an escalation of the euro zone banking crisis. The firm's stock fell to a multi-year low as a result.
Now Dougan has come out and expressed surprise that the SNB suggested a dividend cut and capital raise, confirming 'that is not our plan'.
And The FT quotes one unnamed analyst who said: 'I think it's very unlikely they'll go for a rights issue voluntarily. But if they do, or if they are forced to by regulators, Brady Dougan would come under material pressure to step down as Chief Executive'.
Finally, Bloomberg reports that the SNB will review its communications procedures after trading in bearish options on Credit Suisse surged following the private briefing last week in which regulators disclosed the firm faced a potential capital shortfall.
The SNB will review how it publishes its annual financial stability report, the central bank said in an e-mailed statement Friday. The bank has so far presented preliminary information to journalists under embargo before the official publication of the release, 'to explain the partly complex content of the report', it said.
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