Finance
ECB backs simpler, not looser, bank rules, sources say
Published by Global Banking & Finance Review®
Posted on December 9, 2025
4 min readLast updated: January 20, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on December 9, 2025
4 min readLast updated: January 20, 2026
The ECB plans to simplify bank capital rules by merging SyRB and CCyB, maintaining stability without reducing overall requirements.
By Francesco Canepa
FRANKFURT, Dec 9 (Reuters) - The European Central Bank will propose simplifying rules on capital buffers required of banks, pruning some of the complex regulation put in place after the global financial crisis, two sources familiar with the proposals told Reuters.
The list of measures that ECB Vice-President Luis de Guindos will present to reporters on Thursday aims for fewer, rather than lower, requirements for the amount of capital lenders must hold to cushion themselves against potential shocks.
That is a more conservative approach than regulators in Britain and the United States have taken recently and may disappoint bankers who had been hoping for more respite.
The recommendations, the result of a compromise between different European Union countries, would merge the systemic risk buffer (SyRB) and countercyclical capital buffer (CCyB), two separate capital requirements set by national supervisors, said the two sources. They spoke on condition of anonymity because the matter is still confidential.
A spokesperson for the ECB declined to comment.
STRONG REGULATION SUPPORTS RATINGS
Financial experts said simplification was more than welcome as the current system has become too complex but this should not lead to banks having to hold less capital.
"The strong regulation is a key factor supporting the ratings of European banks," said Marco Troiano, a director at Scope Ratings.
"The messaging from the ECB has been very consistent so far, that there is room to simplify the framework, but that this should not lead to less capital at a system level. I welcome this approach," he said.
The ECB recommendations will next go to the executive European Commission, which shares the power to propose changes to EU legislation with the European Parliament and Council, on which member states sit.
Such changes would take years and could reopen long-standing debates over how far Europe should go in loosening regulations designed to shield taxpayers from having to bail out ailing banks.
BANKERS ARGUED THE RULES WERE TOO COMPLEX
The SyRB and CCyB buffers were introduced by the 27-nation EU as part of a post-crisis overhaul aimed at preventing another banking sector meltdown like that seen in 2007-2008.
Bankers complain these rules are too complex and put them at a disadvantage to U.S. peers, particularly at a time when Donald Trump's U.S. administration is leading a drive to deregulate.
U.S. regulators on Friday scrapped guidance aimed at curbing leveraged lending, which has helped shift business to lightly regulated private-credit funds.
The Bank of England last week cut its estimate of how much capital lenders need to hold – its first reduction since the crisis – in a bid to boost credit and support growth, although it left its countercyclical capital buffer unchanged.
The ECB report, capping months of work by a task force on simplifying regulation, will back the idea of cutting down requirements to just two types - those that can be released at times of stress and those that banks must keep at all times.
The task force will also propose reviewing rules for small lenders and harmonising the data banks report to supervisors, resolution authorities and statistical offices, aiming to lower compliance costs.
NO APPETITE FOR REDUCING OVERALL REQUIREMENTS
The SyRB allows national regulators to demand extra capital where they see risks not covered by other requirements.
Merging it with the CCyB – which is designed to curb credit booms – would cut the number of requirements without necessarily reducing overall demands. How much capital banks will need under the combined buffer will still depend on national supervisors.
A third source familiar with the ECB's thinking said the simplification effort was focused on removing the duplication of rules but there was very limited appetite for reducing overall capital requirements.
The SyRB currently ranges from just 0.5% in countries like the Czech Republic and Italy to 7% in Denmark, and can be applied across the board or just to some types of loans, such as real estate.
The ECB recommendations reflect a compromise among euro zone authorities but show the lack of consensus in other areas, the sources added.
France had pushed for simplifying requirements governing how much capital Europe's seven biggest lenders - four of which are French - must have to absorb losses if they fail.
Germany, where regional and smaller lenders still make up nearly half of the total, wanted lighter treatment for those banks and stricter reliance on equity, rather than convertible bonds, for fulfilling some requirements.
Neither idea won enough support and will appear only as options in the report.
(Additional reporting by Andres Gonzalez in London; Editing by Mark John, Elisa Martinuzzi and Catherine Evans)
The European Central Bank (ECB) is the central bank for the euro, responsible for monetary policy in the Eurozone, aiming to maintain price stability and oversee the banking system.
Capital requirements are regulations that require banks to hold a certain amount of capital reserves to absorb potential losses, ensuring their stability and protecting depositors.
A capital buffer is an additional amount of capital that banks are required to hold above the minimum capital requirements, intended to enhance their resilience during financial stress.
The systemic risk buffer (SyRB) is a capital requirement that allows national regulators to demand extra capital from banks to address risks not covered by other capital requirements.
The countercyclical capital buffer (CCyB) is a regulatory requirement that adjusts the capital banks must hold based on the economic cycle, increasing during periods of high credit growth.
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