ECB Push to Simplify Bank Rules Prompts Fears of Capital Demands

German proposals to radically streamline the capital stacks of banks have become the most contentious issue in the ECB’s push to simplify the rulebook, with worries they could lead to new capital demands for some lenders and reduce harmonization across the euro zone.

While there is broad support for the idea of simplifying banks’ capital requirements, there’s little consensus on the route to achieve that, according to people familiar with the work of a group of ECB governors developing proposals to streamline banking regulation.