You're reading: German supervisor: tougher rules for bond holdings

BERLIN — Germany's chief financial regulator is backing calls for tougher rules on banks' government debt holdings, but says they shouldn't be rushed.

Jens Weidmann, the head of Germany’s central bank, last week said banks should have to secure those bonds — viewed before Europe’s debt crisis as a safe asset — with capital of their own and advocated an unspecified limit on banks’ involvement with government creditors. He argued that would help prevent governments and banks amplifying each other’s problems.

Elke Koenig, who heads Germany’s BaFin financial regulator, was quoted Sunday as telling newspaper Welt am Sonntag it’s a problem “that no capital has to be held back for government bonds” and that needs to change long-term. But she added: “The question is, when is the right point to change it?”