* FTSEurofirst 300 falls 0.7 pct from 2-yr highs
* Banks among biggest losers; Natixis tumbles 12.2 pct
* Risk appetite falls; European volatility index surges
By Atul Prakash
LONDON, Nov 10 (Reuters) - European shares fell on Wednesday from two-year highs, with concerns about euro zone debt problems resurfacing and banks dragged down by a sharp drop in Natixis after it missed profit forecasts.
An emergency cash injection to shore up Brazilian bank Banco PanAmericano also hurt sentiment as the VDAX-NEW index, one of Europe's main barometers of investor anxiety, surged 9 percent -- its biggest one-day percentage rise in more than four months.
The FTSEurofirst 300 index of top European shares ended 0.7 percent lower at 1,109.61 points, after rising 0.6 percent on Tuesday to its highest since September 2008. The index is up 6 percent this year. "Equity markets had partially ignored the rising tensions within the euro zone. Today the focus is more on this after one of the clearing companies increased the margin requirements for Irish bonds," Tammo Greetfeld, equity strategist at UniCredit, said.
LCH.Clearnet, which clears Irish government bonds on behalf of its investment bank clients, said on Tuesday it will increase the margin required to trade Irish sovereign debt by 15 percent as of Thursday, highlighting nervousness about the country. Euro zone peripheral countries such as Ireland and Portugal have set out plans to cut their budget deficits but are struggling to convince markets they will work.
"This risk factor is not going to vanish soon. If tensions within the euro zone escalate, then equity markets will not be able to decouple from a deteriorating government bond market," Greetfeld said.
BANKS BATTERED
Banks featured among the top losers, with the STOXX Europe 600 banking index falling 1.8 percent. Fears grew that some French banks were ill-equipped to face looming tougher capital requirements after results from Natixis showed the impact would be worse than some had expected.
Natixis fell 12.2 percent and dragged down larger rival Credit Agricole, which fell 4.6 percent. The pair are seen as among the most vulnerable to stricter Basel III capital requirements in Europe which come into force in 2019.
Credit Agricole said it did not plan to raise capital to meet Basel requirements as it posted higher-than-forecast quarterly results.
Equities have fallen after gaining for weeks before the U.S. Federal Reserve's decision last week to purchase $600 billion in Treasury debt to spur a sluggish economy. Since late August, the FTSEurofirst 300 index has gained about 11 percent.
"There might be a bit of weakness until we get some resolution about Ireland," said Mark Bon, fund manager at Canada Life in London. "The market is looking for a Greek solution to the Irish problems, which would remove uncertainty.
The market ignored encouraging economic numbers and focused on countries such as Ireland. Data showed initial claims for U.S. jobless benefits hit a four-month low last week, while the trade gap narrowed more than expected in September.
Mining stocks slipped after strong gains the previous session as metals prices retreated on weak Chinese imports and higher reserve requirements announced by the country.
BHP Billiton, Antofagasta and Eurasian Natural Resources fell 2.4 to 3.8 percent.
Across Europe, the FTSE 100, Germany's DAX and France's CAC 40 fell 1 to 1.5 percent. Ireland's ISEQ, Spain's IBEX 35 and Italy's MIB slipped 1.7 to 2.4 percent, while the Thomson Reuters Peripheral Eurozone Countries Index was down 2.7 percent.
(Additional reporting by Brian Gorman; editing by David Hulmes)