7:00 PM Frankfurt, Paris; 1:00 PM New York – Banks in Europe gained on the hopes that European regulators will delay the implementation of capital requirement rules. Greece plans to trim its fiscal deficit to 8.7% in the next year and S&P lowered its rating on the Greek sovereign debt. Credit Suisse agreed to $536 million fine from the U.S. and New York regulators.

European markets closed higher after banks rebounded on the hopes that Basle based banking regulators will delay the implementation of capital adequacy rules.

In London FTSE 100 Index closed higher 34.49 or 0.65% to 5,320.26, in Paris CAC 40 Index increased 41.73 or 1.09% to close at 3,875.82, in Frankfurt DAX index higher 92.09 or 1.58% to close at 5,903.43. In Zurich trading SMI increased 92.92 or 1.44% to close at 6,532.32.

Greek Finance Minister George Papaconstantinou said in London today that the government has an aggressive target of lowering its budget deficit to 8.7% of the total output from previous target of 9.1%. Of the €9 billion cut will be achieved with €4.5 billion in increased tax collection and the other half from the cut in government spending.

Separately, Standard & Poor’s lowered the rating on Greek debt to BBB+ from A- and said that rating could be revised lower if it “fails to implement credible fiscal reforms.”

Credit Suisse Agrees to $536 Million Fine

Credit Suisse agreed to pay $536 million in fines and deferred prosecution agreement as a part of the settlement with the U.S. Justice Department. The fine is related to payment processing conducted on behalf of clients in Iran between 2002 and 2007. The bank had previously set aside as much as Sfr 360 million or $345 million for the previously disclosed probe.

Federal Reserve also asked Credit Suisse to improve its compliance program which is required to be certified by chief executive Brady Dougan until June 30, 2011.

There are three separate sanction regimes imposed on Iran from the United Nations, U.S. and the European Union.

Gainers & Losers

Accor SA declined 1.8% to €37.44 after the hotelier said board of directors Tuesday voted to split the company into two separate, listed companies after sustained from shareholders for years.

Aurubis AG decreased 0.5% to €29.85 after the copper refiner said full-year sales fell 20% to €6.9 billion from €8.4 billion a year ago. Net profit in the full-year fell 78% to €53 million or €1.28 per diluted share compared to net profit of €237 million or € 5.82 per share a year ago.

Compagnie des Alpes SA the ski-resort operator rose 0.9% to €26.34.

CNP Assurances (CNP) SA the life insurer slipped 0.1% to €69.01.

Daimler AG rose 1.7% to €36.99 said Wednesday that the company has extended the contract of truck and business division leader and the board member Andreas Renschler until September 2013.

Deutsche Bank AG added 4.3% to €51.65 after the bank was upgraded to “selected list” from “outperform” at CA Cheuvreux.

Eramet SA climbed 0.2% to €224.45 after the integrated mining and metallurgical company said French nuclear technology company Areva said Tuesday that its shareholder pact with Sorame/CEIR in metals group will be extended for another six months, effective Jan. 1, 2010, provided neither partner gives notice of its intention to terminate the agreement by Tuesday.

Essilor International SA added 0.8% to €41.22 and the maker of eyeglass lenses and FGX International Holdings Limited today signed a definitive agreement to merge with a subsidiary of Essilor International of Charenton-le-Pont.

GiFi SA the discount clothing and homeware retailer fell 0.9% to €51.00.

JCDecaux SA increased 4.8% to €16.99 after the seller of outdoor advertising was upgraded to “neutral” from “reduce” at Nomura Holdings Inc.