ANTIQUES SHOPS

"Of course I am disappointed. FINMA has given us directions as to how we should strengthen capital. We are fulfilling those," Dougan told the SonntagsZeitung paper in an interview.

"Even more surprising were the suggestions by the SNB to cut the dividend and to raise capital."

In its annual financial stability report published on Thursday, the Swiss National Bank (SNB) said Credit Suisse should urgently boost its loss-absorbing capital base by cutting risk, suspending dividends or issuing shares, sending the stock down 10 percent.

Dougan noted that FINMA is the regulator of the Swiss banks, rather than the SNB but said the bank was still taking the central bank's comments seriously. However, he rejected the idea of a capital hike: "That is not our plan".

"We assume that we will generate enough profit in the coming quarters to create extra equity capital," he said, adding that the bank was also offering shareholders the choice of receiving their dividends in shares, which demands less capital.

The criticism from the SNB has increased pressure on Dougan, who was lauded for navigating the bank through the subprime crisis relatively unscathed, but has come under fire of late for squandering that advantage as the bank's shares languish.

Dougan told the paper he had no plans to step down and was working closely with the board, but admitted some mistakes.

"Last year we massively cut the cost base. From today's perspective, I must concede that the critics were right who said we should have acted even earlier," he said.

Dougan added he was particularly surprised about the public criticism from the SNB as Chairman Thomas Jordan had not discussed the need for Credit Suisse to cut its dividend and raise capital when the two men met for lunch just 10 days ago.

He said the SNB's calculations of Credit Suisse's capital were incomplete and based on a very pessimistic scenario for the euro zone debt crisis, adding the report had shaken the confidence of clients and investors: "That is not just bad for us but for the whole financial centre."

Dougan rejected suggestions the SNB's concern was related to a U.S. investigation into whether the bank helped wealthy Americans evade taxes by providing secret offshore accounts.

The bank is expected to have to pay a hefty fine and hand over U.S. client names as part of a settlement.

Oswald Gruebel, a former Credit Suisse CEO, said the bank's shares had fallen sharply on Thursday because shareholders were afraid that the bank would have to raise capital.

"But CS also has the possibility to cut its balance sheet and thereby indirectly increase its capital, or do both," Gruebel wrote in his weekly column for Der Sonntag newspaper.

But Hans Geiger, a retired Zurich University banking professor and a former senior executive at Credit Suisse, said the bank was ill advised to try to fight the SNB.

"The reaction of CS is fatal," Geiger told the Tages-Anzeiger newspaper on Saturday. "Whoever goes on a confrontation course with the national bank has lost their reason." (Reporting by Emma Thomasson; Editing by Alison Birrane)

The deal will include an 11-year refit of Britain's sole submarine propulsion reactor factory at Derby in central England, said Defence Secretary Philip Hammond, who will formally announce the plans to parliament on Monday.

"This is sustaining a sovereign capability in the UK and some very high end technical skills in the UK for the next 40 or 50 years," he told BBC television, without giving further details of the contract.

The investment will protect 300 jobs at the Rolls-Royce factory and many others at suppliers elsewhere, the source said.

The 1 billion pound value of the deal will be shared between Rolls-Royce and its other industrial partners, a source close to the company said.

The two-party coalition government is split over plans to replace Britain's four Vanguard submarines at an estimated cost of 25 billion pounds when they retire from service in the 2020s.

Prime Minister David Cameron's Conservative Party - to which Hammond belongs - wants a new fleet of submarines that will continue to carry the Vanguard's Trident missiles, maintaining Britain's independent nuclear capability.

Their smaller Liberal Democrat partners are pushing for cheaper and less potent alternatives, arguing that the current capability - the ability to obliterate Moscow - is an outdated hangover from the Cold War.

The two parties have postponed a final decision till 2016, after the next parliamentary election, while agreeing in the meantime to fund the advance work needed to allow the submarines to be built on schedule should they be commissioned.

The Liberal Democrats insist that the advance contracts do not represent a commitment to a like-for-like renewal, but some analysts say it is unlikely that cash-strapped Britain would lay out huge sums on design and equipment that it would later ditch.

Hammond insisted the government had not yet made up its mind about Britain's future nuclear deterrent.

"The government's policy is very clear. We are committed to maintaining a credible nuclear deterrent and we are placing orders now for the long-lead items that will be necessary to deliver a successor to the Vanguard class submarines in the late 2020s," Hammond said.

"But the actual decision to go ahead and build them won't have to be taken until 2016 and what we are doing at the moment is ordering the things that have to be ordered now to give us that option."

The government said last year it expected to spend 3 billion pounds by 2015 on preparatory work for the new submarine fleet.

The Rolls-Royce deal also includes a contract to build the reactor for the last of seven Astute class nuclear-powered attack submarines that Britain already has on order.

The nuclear propulsion plant for the Vanguard's successor will be the more advanced Pressurised Water Reactor 3 (PWR3) system, the government said last year.

Last month Hammond announced 350 million pounds of contracts, mainly with defence contractor BAE Systems, to design the Vanguard's successor submarines.

(Additional reporting by Rhys Jones; Editing by Kevin Liffey)

The Inclusive Wealth Index was unveiled by the United Nations University's International Human Dimensions Programme on Global Environmental Change (UNU-IHDP) and the United Nations Environment Programme (UNEP).

Scientists and environment groups have been pressuring governments to include the value of their countries' natural resources - and use or loss of them - into future measurements of economic activity to show their true future growth prospects.

The idea of an expanded indicator known as GDP+ to include GDP and natural capital will be on the agenda of the Rio+20 summit from June 20 to June 22, when environment ministers and heads of state from around 200 countries will try to define sustainable development goals.

The index shows the "inclusive wealth" of 20 nations, taking into account manufactured, human and natural capital like forests, fisheries and fossil fuels, instead of relying only on gross domestic product (GDP) as a growth indicator.

The index assessed Australia, Brazil, Canada, Chile, China, Colombia, Ecuador, France, Germany, India, Japan, Kenya, Nigeria, Norway, Russia, Saudi Arabia, South Africa, United States, Britain and Venezuela, from 1990 to 2008.

Together, these countries accounted for almost three-quarters of global GDP over the 19-year period.

The index showed that 19 out of the 20 countries experienced a decline in natural capital. Six nations also saw a decline in their overall inclusive wealth, putting them on an unsustainable track, UNEP said.

"Rio+20 is an opportunity to call time on Gross Domestic Product as a measure of prosperity in the 21st century, and as a barometer of an inclusive green economy transition," U.N. Under-Secretary General and UNEP Executive Director Achim Steiner said in a statement.

"It is far too silent on major measures of human well-being, namely many social issues and the state of a nation's natural resources," he added.

NATURAL CAPITAL

The index showed that even though China, the United States, Brazil and South Africa experienced GDP growth, their natural capital was significantly depleted.

When measured solely by GDP, the economies of China, the United States, Brazil and South Africa grew by 422 percent, 37 percent, 31 percent and 24 percent respectively between 1990 and 2008.

When their performance was assessed by the IWI, China's economy grew by 45 percent, the United States by 13 percent, Brazil by 18 percent and South Africa decreased by 1 percent, mainly due to the depletion of natural resources, UNEP and UNU-IHDP said in a statement.

Six nations - Russia, Venezuela, Saudi Arabia, Colombia, South Africa and Nigeria - experienced negative growth under the IWI, whereas it was positive under GDP measurements.

Commenting on the report, John Sulston, chair of the Royal Society working group on population and Nobel Prize-winning scientist, said traditional measurements of wealth do not take into account the state of the world around us and the inclusive wealth index was a way of correcting this deficiency.

"Applying the IWI to a sample of 20 countries reveals some that are considered good economic performers are actually in the environmental red, borrowing natural resources that they just can't pay back," he added. (Editing by Stephen Nisbet)