An unexpected loss from Wachovia and its plans to raise $7 billion are stark reminders that the credit crisis is far from over.

That was underscored on Friday when a troubled March for General Electric's financial businesses caused the conglomerate to report a surprising miss in earnings. More upsetting news may come this week, when Merrill Lynch and Citigroup report first-quarter losses.

What is unsettling to investors is that nearly a year after the implosion in subprime mortgages first shook the markets, banks are still struggling to get an accurate reading on the depth of their losses. A number of housing markets continue to deteriorate, and events like the teetering of Bear Stearns in March can create damaging ripple effects for other institutions.

Wachovia reported a loss of $350 million, or 20 cents per share, in its first quarter compared with a profit of $2.3 billion, or $1.20 per share, in the quarter a year earlier. The fourth-largest bank in the nation will cut its dividend by 41 percent and will raise $7 billion from the sale of convertible preferred stock and common shares.

The bank is setting aside $2.8 billion for credit losses on mortgage-related investments. "The provision largely reflected more severe deterioration in the residential housing market, particularly in specific markets in California and Florida," Wachovia said.

Many of Wachovia's troubles stem from its 2006 acquisition of Golden West, a California-based lender that was a leader in adjustable-rate mortgages.

"With the benefit of hindsight, it is clear that the timing was poor for this expansion in the mortgage business," Ken Thompson, the chief executive of Wachovia, said in February.

Today Thompson said: "I'm deeply disappointed with our first-quarter results, but I am confident we're taking prudent and appropriate actions in this challenging period to restore Wachovia to a more profitable path. The precipitous decline in housing-market conditions and unprecedented changes in consumer behavior prompted us to update our credit-reserve modeling and rely less heavily on historical trends to forecast losses. As a result, we have substantially increased our reserves."

Wachovia is the latest big bank to shore up its capital. It follows the route taken last week by Washington Mutual, by selling shares. For Wachovia, however, this is the second time this year it has raised capital. Earlier, it raised $8.3 billion through the sale of preferred stock and securities.