Deutsche Bank AG, Germany's biggest lender, and UniCredit SpA are among European banks that may have to raise additional capital after regulators dismissed lenders' threats that stiffer rules may stunt economic growth.
Regulators meeting in Basel this weekend agreed to make as many as 30 of the world's largest, or systemically important, banks hold as much as 2.5 percentage points more capital than the 7 percent core Tier 1 capital required. They also blocked European banks' requests to use hybrid capital, such as contingent convertible bonds, to meet the target. The biggest banks will use mostly retained earnings and ordinary shares.
Lenders had lobbied against the extra capital requirements, saying they risked stunting the global economic recovery and some had sought to avoid being categorized as systemically important. The decision marks a loss for European banks that are grappling with the region's debt crisis and had sought to use hybrid capital to meet regulators' extra requirements.
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