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May 03, 2012 at 05:21 AM
Although discussions dragged on till the wee hours of the morning, E.U. finance ministers were unable to put together a deal on toughening bank capital rules. They will now be forced to attempt to find common ground at their next meeting on May 15.
Bloomberg reported Thursday that, despite 16 hours of talks that carried over from Wednesday, in the end differences proved stronger than common ground as some countries insisted on more autonomy for their governments in imposing even stronger restrictions than current proposed rules call for.
Britain in particular was outspoken in demanding the right to boost capital reserves beyond proposed requirements, and Chancellor of the Exchecquer George Osborne said that London would also seek additional discretion on so-called macro-prudential oversight tools, such as when regulators can take steps to intervene in housing markets.
Denmark had proposed a compromise agreement on permitting governments to force their banks to add risk buffers of up to 5% to guard against domestic and non-E.U. exposures. Finance Minister Wolfgang Schaueble of Germany also warned that failure to come to an agreement “will be dangerous.” Nonetheless, ministers are resolved to try to overcome differences by the May 15 gathering.
