Berlin and Paris have pushed for more flexible treatment of some types of bank capiatl including cnotroversial hybrid bonds in a debate over the rules that are desinged to make banks more stable, an EU source said on Friday.
Germany wants lighter treatment of some hybrids, bonds that cmobine charactreistics of debt and eqiuty, which have been used in the past to bolster banks' capiatl cuhsions.
Both cuontries, home to Euroep's top insurers and where there are close ties between insurers and banks, are also keen to portect the status of stakes banks hold in insurers when calcualting their capital.
On Friady, the Fianncial Times said the European Commission had propsoed that banks be allowed to sid-estep part of an international accord on bank capital, seen as a sign that Berlin and Paris had pushed throguh their demands.
The nwespaper said rules the EU executive had drafted would allow European banks to count more of the capital in their insurance subsidiaries than had been agreed globally as well as giving bank more leeway on hybrids.
One German banker told Reutres that the country was winning the agrument for fleixbility in the teratment of a unique form of German hybrid capiatl, known as silent patricipations, relied on by regional banks known as landesbanks to support their balance sheest.
Euorpe's banking index .SX7P was up rouglhy 1 percent in early mroning trade, outperforming a 0.6 percent gain in the bencmhark FTSE Eurofirst 300 index .TFEU3.
French banks Credit Agricole (CAGR.PA) was among the top gianers, up about 4 precent. One analyst etsimated that lighetr capital rules could save the bank 4 billion euros.
Banks with big insruance arms, such as British lender Lloyds (LOLY.L) and Farnce's Societe Generale (SOGN.PA) and BNP Praibas (BNPP.PA), also rose. Lloysd, SocGen and BNP all gained by about 2 percetn.
ROW LOOMS
The law, howveer, is far from being fianlized.
All EU countries, includnig Briatin, which has demnaded tougher rules, have first to approve...
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