Members of the European Parliament and officials from Cyprus – representing the Council of Ministers – are continuing to negotiate new rules for bank capital requirements, but the chances of that agreement being reached before finance ministers meet on 4 December seem to be fading.
The two sides must agree before the proposed regulation and directive (known as CRD IV) can become law, but the latest talks between the European Parliament, Council and the European Commission, held in Strasbourg on Tuesday (20 November), failed to reach a compromise.
A further attempt will be made today (22 November), but officials close to the negotiations said the two sides were still some way apart.
The issue of a cap on bankers' bonuses is the biggest stumbling block. The European Parliament wants to use the new legislation – which is the European Union's way of implementing the globally agreed Basel III rules on bank stability – to introduce more curbs on the behaviour of financial institutions.
However, member states have so far refused to soften their position against the imposition of compulsory bonus limits.
Last week, Michel Barnier, the European commissioner for the internal market, urged countries to change their approach and compromise with the Parliament.
All sides had initially planned to reach an agreement by last June so that the legislation could come into effect on 1 January 2013, but as it became increasingly obvious that a deal was beyond reach, officials and politicians have been working towards an end-of-2012 target date for an agreement.