Banks in the US and Europe face a huge round of capital raisings to cover writedowns and deleveraging, according to strategists at Credit Suisse, who predict as much as $560bn (€409bn) could be required. The forecasts come as French banks begin a second round of state recapitalisations.

In a normal banking crisis, Credit Suisse predicts that about 6% of gross domestic product would need to be written off. However, if the banking crisis turns out to be deeper - equivalent to the Finnish or Norwegian banking crises of the early 1990s - write-offs of about 10% of GDP would be required in the countries that have experienced housing booms.