EU states and the European Parliament failed on Thursday to agree tougher capital rules for banks and in any case will miss a globally-agreed January deadline for their phase-in to start.
"There is no deal," a spokeswoman for the European Parliament said after the meeting ended in Strasbourg, France.
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The measure under discussion would put a global accord known as Basel III into European Union law as part of a drive by governments and regulators across the world to prevent a repeat of the 2007-09 financial crisis.
That would force the EU's 8,000 banks to triple the amount of capital they hold compared with before the crisis, in the hope that would make them strong enough to cope with market shocks without the need for more taxpayer-funded rescues.
The talks made some progress and both sides will meet again on Tuesday in a fresh bid to settle remaining points of disagreement next week, the spokeswoman said.
The two sides had met on Tuesday and stumbled over two issues: what to count as capital, and parliament's insistence that bank bonuses should be no higher than salaries.
The delay means banks and investors are left in the dark for longer about the exact impact of new rules on future profitability as the EU law will diverge in some respects from the global Basel accord.
The United States is also delaying its introduction of Basel III.
World leaders agreed two years ago that Basel III should be phased in from January, but an EU deal would still need to be voted into law across the 27-country bloc, meaning a formal start before the second half of 2013 or later is impossible.
A Bank of Italy official on Tuesday expected the law to take effect at the end of next year or January 2014.
"The date for introduction will be the last thing on the agenda after all other points are agreed," one of the parliamentary sources said.
Thursday's talks tried to iron out disputes such as how much leeway local supervisors should have to force banks to hold more capital than the 7 percent core minimum under Basel.
There has also been disagreement over how liquidity buffers and caps on balance sheets should be introduced from 2015.
Separately, the global Basel Committee, which wrote Basel III, is meeting to discuss easing its planned liquidity buffer as economic conditions remain tough.
It is not clear if the committee will issue a statement on Friday or wait until its conclusions have been signed off by its oversight body which is expected to meet next month. (Reporting by Huw Jones; Editing by Anthony Barker and Mark Potter)