EU makes new bid to end deadlock on bank capital
By John O'Donnell and Ilona Wissenbach
BRUSSELS (Reuters) - EU countries are making a fresh attempt to break the deadlock over new bank capital rules and ministers are due to meet on May 2, officials and diplomats said, accelerating efforts to find agreement on measures crucial for lending and the economy.
The European Commission has proposed new standards for the amount of capital banks across the 27-state European Union must hold to cover risks.
But Britain is demanding the flexibility to impose higher levels of capital on banks if necessary, putting it at loggerheads with Germany and France, which favor a uniform standard across Europe.
Clarifying the precise rules on capital, almost five years after the start of the financial crisis that toppled lenders, would remove some uncertainty for banks, already nervous about lending as Europe slides into recession.
But in recent weeks, the complex debate has become bogged down in a dispute that has pitted not only Europe's most powerful countries against one another but also some of the region's top institutions, including the European Central Bank.
Time is running out for the EU to finalize its rules that will reshape post-crisis banking in the decades to come.
World leaders have agreed to start phasing in global bank capital rules, known as Basel III, from next year and the EU wants to finalize its framework within months.
Now Denmark, which as the current holder of the EU presidency and responsible for brokering an agreement on such issues, has taken the unusual step of calling an extra meeting of finance ministers in Brussels on May 2 to break the logjam. Continued...