EU finance ministers have inched closer to an agreement to beef up capital rules for banks against future crises after a heated debate between British-led nations and a Franco-German bloc.
The talks, which began at breakfast Wednesday, finally ended in the wee hours of Thursday (local time) with a compromise after discussions that saw Britain's George Osborne warn he would not sign anything that would make him "look like an idiot".
The special meeting was called to find a common EU position on the Basel III regulation, which will require banks to increase their capital buffers to avoid a repeat of the massive 2008 bailouts they received.
"We have an agreement, it needs technical work before it is technically done," Danish Economy Minister Margrethe Vestager, whose country holds the rotating EU presidency, said after almost 16 hours of talks.
She said the ministers resolved 20 issues during the day and a final agreement would come at their next meeting on May 15.
The ministers were sharply divided, with Britain and Sweden seeking freedom to impose tougher capital requirements than under Basel while the Franco-German bloc wants all 27 EU nations to follow the same standards for more than 8000 banks.
Osborne, whose country is home to Europe's biggest financial centre, told his colleagues during the televised debate that he was "not prepared to say something that is going to make me look like an idiot five minutes later".
German Finance Minister Wolfgang Schaeuble had voiced concern that the EU may never reach an agreement if a deal was not found, warning that such an outcome would be "disastrous".
Paris and Berlin want a "maximum harmonisation" of the rules, fearing that allowing nations to set higher thresholds would spark a race for the biggest reserves that would divert funds away from investments and lending.
The fraught discussion came in the midst of concerns about the health of the Spanish banking sector.