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Finance

EU finance ministers put off decision on new capital rules

After talks that dragged on for 16 hours, EU finance ministers have put off making a final decision on enshrining the so-called Basel III bank capital guidelines into European law.

European Union finance ministers put off an agreement on higher capital requirements for banks early on Thursday after 16 hours of negotiations in Brussels failed to produce a compromise.

EU leaders have been discussing how to best implement the so-called Basel III guidelines, which require banks to keep more safe and healthy investments on the books so they are less vulnerable to financial crises.

While Basel III was agreed to in principle by the EU and other Group of 20 leading economies in 2010, it has yet to be officially written into European law. The finance ministers of the EU's 27 member states agreed to discuss the details again at their next scheduled meeting on May 15.

The talks dragged on exclusively in English after interpreters left late in the night. German Finance Minister Wolfgang Schäuble left the meeting around 11 p.m., handing over responsibility to a state secretary.

Even after the finance ministers agree to the new rules, the European Parliament must conduct parallel negotiations.

Devil's in the details

Countries like the UK and Sweden have been lobbying for the capital standards to be a minimum, giving states the power to unilaterally demand domestic banks hold even more capital than the rules stipulate.

Denmark, which holds the rotating EU presidency, has proposed allowing states to impose a requirement of an extra 3 percent of capital, while Sweden has been pushing for 5 percent.

"Either we have strong banks or the taxpayers take the risk," Swedish Finance Minister Anders Borg told reporters. "I prefer to have strong capital in the banks."

Despite their disagreements on details, all the finance ministers were keen to express the necessity of implementing Basel III as soon as possible.

"If we duck the challenge of implementing Basel we could face very important challenges to confidence in Europe this year," said Britain's Chancellor of the Exchequer George Osborne.

acb/jm (AP, dpa)