European banks lack capital buffers, ECB reviewing bad loan guidelines

European banks in focus

Two Reuters stories citing unnamed sources are doing the rounds related to European banks.

The first says Europe's banks haven't set aside the capital buffers needed to comply with EU rules. The bail-in regulator requires at least 8% of capital. The story doesn't say how many banks are falling short.

A separate report says the ECB is preparing new guidelines for how banks can handle bad loans. The IMF says there are 1 trillion euros of non-performing loans in the region and the ECB believes they're holding back the recovery. The first step from the ECB will be defining best practices.