UPDATE 1-Credit Suisse backs CEO, rebuffs SNB
ZURICH, June 22 (Reuters) - Credit Suisse's board stuck to its guns on Friday by backing the bank's management under chief executive Brady Dougan despite last week's stinging rebuke from the Swiss National Bank (SNB) for not boosting capital levels quickly enough.
The central bank's stance and a three-notch downgrade of Credit Suisse's long-term debt by ratings agency Moody's on Thursday has increased pressure on Dougan.
In a brief statement on Friday, however, the bank said: "The board is comfortable with the progress that has been made towards meeting the Basel III capital requirements and is confident that management's plans will continue to ensure that Credit Suisse Group not only fulfils, but exceeds its regulatory capital requirements."
While not mentioning specific measures, the statement is implicit board backing for Credit Suisse's plan to bolster capital by stowing profits, rather than issuing new shares.
The SNB had urged Credit Suisse to take whatever action necessary, such as suspending dividends, issuing new shares and cutting risk, to increase its common equity Tier 1 capital far faster than required to shield Switzerland from the "substantial risk" to the country if a euro zone bank collapses.
Credit Suisse's statement represents an unusually direct confrontation with the central bank in a country where conflicts are usually carried out behind closed doors. Dougan also criticised SNB in an interview with Sunday newspaper Sonntags Zeitung.
Dougan is widely lauded for avoiding a government bailout in 2008, but he has since fallen out of favour with some investors, who criticize his failure to scale back Credit Suisse's investment bank dramatically enough in the face of far stricter Swiss and international capital requirements for riskier businesses.
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