Global banking regulators are standing by a key reform to capital rules in defiance of opposition from Europe, potentially complicating efforts to complete work on the post-crisis framework by the end of the year.

Basel Committee on Banking Supervision Chairman Stefan Ingves said “good progress” was made during talks in Santiago, Chile, this week and the “contours” of an agreement on revisions to the capital standards known as Basel III are clear. That includes an “output floor” intended to prevent banks from gaming the rules, a proposal rejected by some top European Union policy makers.

“I expect an aggregate output floor will be part of our package of reforms,” Ingves said in a speech in Santiago Wednesday after the Basel Committee's two-day meeting. The regulator's oversight body, led by European Central Bank President Mario Draghi, will need to endorse the rule, Ingves said.