Eurozone banks will need to raise a total of about $270bn (€224bn) in common equity and more than $4 trillion in long-term debt from now until 2015 to meet new regulatory requirements for increased capital buffers and liquidity ratios, meaning the continent's financial system will be far more adversely affected than those of the US or Japan, a report by the Institute of International Finance has warned.

The IIF, a trade association for the world's banks with over 400 members, said in a preliminary report published today on the costs of regulatory reform on economic growth that banks in eurozone, which excludes UK banks, would be hardest hit.