EU Lawmakers to Weigh Easing Capital Rules on Safest Bank Bonds

European Union lawmakers are set to consider adopting lower regulatory requirements for covered bonds as part of a broader overhaul of capital markets.

Ralf Seekatz, a German member of the European Parliament, plans to release a proposal soon to reduce capital charges on covered bonds, according to a person familiar with the matter.

The moves are aimed at making it easier for banks to unleash financing for housing, defense and other projects that can boost Europe’s economic growth. Earlier this year, Europe’s member states discussed options to revamp the €1.2 trillion ($1.4 trillion) securitization market that included significantly cutting ...