FRANKFURT (Reuters) – The European Central Bank will ask Deutsche Bank to raise fresh funds before it gives the go-ahead for a merger with a state-backed rival, a person with direct knowledge of the matter said.

FILE PHOTO: The headquarters of the European Central Bank (ECB) are illuminated with a giant euro sign at the start of the “Luminale, light and building” event in Frankfurt, Germany, March 12, 2016. REUTERS/Kai Pfaffenbach/File Photo

The official said that Deutsche would be required to have the buffer, which has yet to be calculated, to cope should it experience setbacks while integrating Commerzbank if a deal is agreed.

The demand could complicate a bid to create Europe’s third-largest bank from Germany’s top two lenders, Deutsche and Commerzbank, who have struggled