Stricter capital requirements for EU bonds to stabilize financial system.
Government bonds in the EU can be risky investments, especially after the European debt crisis. The Basel Committee and the Bundesbank are discussing whether banks should have to hold more capital when investing in these bonds. German, French, and Swedish banks would need to raise billions of euros, but Greek banks would struggle the most. Requiring banks to use more equity capital for these investments could make the financial system in Europe more stable in the long run.