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Basel Capital Rules Stand

Deutsche Bank, UniCredit lose argument that requirement could stunt economic growth.

By Elisa Martinuzzi, Liam Vaughan, Bloomberg | Updated on June 27, 2011

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.

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