Germany reluctantly backs compromise on new global bank rules

FRANKFURT (Reuters) - German regulators are backing a compromise for passing new global banking rules aimed at avoiding a repeat of the 2007 financial meltdown, their representative at the talks said on Tuesday.

The rules, known as Basel III, have been 10 years in the making and recent efforts to reach a deal were hampered by resistance from Germany and France to setting a minimum capital requirement for large banks that use own models for calculating risk.

But Andreas Dombret said Germany's Bundesbank and main financial supervisor BaFin supported the latest proposal on such "output floor" even this was "anything but a desired result".

The compromise would see the floor set at 72.5 percent of the capital banks would have to hold under a stricter model set by regulators, down from the 75 percent envisaged originally, Dombret said.

"A possible compromise with an output floor of 72.5 percent is anything but a desired result for Germany," Dombret said. "But a failure because of 2.5 percentage points - BaFin and the Bundesbank agree - would not be justified."

(Reporting By Francesco Canepa; Editing by Angus MacSwan)