Bundesbank Favors ‘Radical’ Capital Simplification for Lenders

Germany’s central bank favors stark changes to the set-up of the various financial reserves that lenders have to keep on hand to absorb losses before they can pay out excess funds to investors.

While US banks face a clear bar for high quality capital, their peers in Europe have to maintain a series of buffers set by national, European and international bodies.

Work undertaken by various authorities in Europe to simplify banking rules presents a “big chance” and could tackle the issue of the “capital stacking order,” Michael Theurer, an member of the institution’s executive board, said in a ...