FRANKFURT, July 13 (Reuters) - European banks expect new accounting rules due to kick in next year to eat into their capital and push up the amount of money they must set aside against bad loans by nearly a fifth, a survey by the EU's banking watchdog showed on Thursday.
The new International Financial Reporting Standards (IFRS 9) aims to make banks safer and avoid a repeat of the 2007-09 crisis by requiring them to put aside some money for loan losses much sooner than at present.
But these rules may add to the woes of banks that have high levels of soured credit and are already struggling to raise capital, which forced Spain's Banco Popular and two regional Italian banks out of business in recent weeks.
Two-thirds of banks surveyed by the European Banking Authority said they expected their provisions to go up by up to 18 percent as a result. The average respondent envisaged a 13 percent increase. (Reporting By Francesco Canepa; Editing by Toby Chopra)