Global banking regulators are standing by a key reform tocapital rules in defiance of opposition from Europe, potentiallycomplicating efforts to complete work on the post-crisis frameworkby the end of the year.

Basel Committee on Banking Supervision Chairman Stefan Ingvessaid “good progress” was made during talks in Santiago, Chile, thisweek and the “contours” of an agreement on revisions to the capitalstandards known as Basel III are clear. That includes an “outputfloor” intended to prevent banks from gaming the rules, a proposalrejected by some top European Union policy makers.

“I expect an aggregate output floor will be part of our packageof reforms,” Ingves said in a speech in Santiago Wednesday afterthe Basel Committee's two-day meeting. The regulator's oversightbody, led by European Central Bank President Mario Draghi, willneed to endorse the rule, Ingves said.