May 2 - Europe's finance ministers are trying to strike a deal that will force banks to set aside more cash to prevent another crisis. Joanne Nicholson reports.
Getting Europe to agree on how best to help its banks is no mean feat EU finance minsiters accept banks must set aside more capital to cushion losses but they're struggling to agree on how much. The freedom countries have to enforce capital rules is at the heart of the debate in Brussels. The UK and Sweden - who have relatively large banking sectors - fear they could end up bailing out banks in other countries (SOUNDBITE) (English) SWEDISH FINANCE MINISTER ANDERS BORG SAYING: "We would like to be able to put a domestic charge of 5 percent extra on capital and an general extra charge of 3 percent, so, we are a little bit away from where we want to be" Germany's Finance Minister accepts that but hopes an agreement can be reached. (SOUNDBITE) (German) GERMAN FINANCE MINISTER WOLFGANG SCHAEUBLE SAYING: "The British want, which in principle is not wrong, to have the possibility to enforce stricter national rules, but of course we have to make sure that we have unified rules, that is necessary for the European banking authorities, so we have decent cross-border oversight." Spanish banks are a particular concern - rating's agency Standard and Poor's downgraded 11 of them this week as the euro zone's forth largest economy sunk into recession. Little wonder then, that their finance minister, Luis de Guindos, wants a deal that will help them out of the crisis. (SOUNDBITE) (Spanish) Luis de Guindos, Spain economy minister, saying: "What Spain expects from this directive is to get a guarantee to a level of quality capital that would be enough to face future financial crises. That is the essential goal for Spain." An agreement isn't expected to be reached quickly. Denmank - the current holders of the EU presidency - hope to have a consensus by the end of June and a working deal by the end of the year. Joanne Nicholson, Reuters