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Regulatory angst curbs investor appetite for European banks

Some think the rules would thwart lending to smaller firms and may choke growth

Many investors worry that the ECB's proposal in October that banks set aside more cash to cover bad loans, would force weak lenders to ask shareholders to provide the cash to plug losses.


UNCERTAINTY about the timing and scope of regulatory efforts to strengthen Europe's financial system is adding to investor caution about increasing exposure to European over US banks, even as the economy and earnings improve.

European bank stocks, overshadowed by some 800...

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