LONDON European banking stocks rose on Monday after regulators eased global bank liquidity rules in order to enable lenders to issue more credit to help struggling economies grow.
The STOXX Europe 600 Banking index .SX7P was up by 1.2 percent at 0804 GMT, outperforming a flat STOXX Europe 600 .STOXX.
On Sunday, the Basel Committee of banking supervisors pulled back from a draconian earlier draft of new global bank liquidity rules.
French and Italian lenders led gainers across the sector, with BMPS (BMPS.MI) up 6.1 percent, Credit Agricole (CAGR.PA) up 4 percent and Societe Generale (SOGN.PA) up 3 percent.
"Any loosening of the rules is going to be positive for the sector," said Toby Campbell-Gray, head of trading at Tavira Securities.
(Reporting by Sudip Kar-Gupta; editing by Simon Jessop)