Meeting on 14 May, the member states' finance ministers unanimously adopted the Council's general approach (which is not a legal text) on reform of capital requirements for banks (CRD IV) after the United Kingdom accepted the Danish EU Presidency's compromise. The Council and European Parliament can now begin their negotiations on the text (see separate article).

The compromise fully preserves the balance struck by ministers after hours of negotiations at their meeting, on 2 May (see Europolitics 4417). The Council nevertheless approved three fairly technical amendments (set out in three documents for the sitting) backed particularly by the United Kingdom and Bulgaria. Chancellor of the Exchequer George Osborne considered that the compromise text of 2 May did not go far enough in terms of states' flexibility in applying new prudential rules to financial institutions. The Commission initially proposed maximum harmonisation of rules.

London finds that the text will permit it to apply the recommendations of the Vickers Commission (named for its chairman) put in place by the government to review bank sector reform. Overall, these provide for a separation of retail and investment banking activities. "It enables Britain to implement the recommendations of the Independent Commission on Banking in full, and is the basis that allows Europe to implement the global agreement on banking standards" (Basel III agreements), commented a spokesman for the British treasury.

The Presidency's compromise...

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