Designed to improve the stability of the banking system, the Basel III standards will increase the amount and quality of the capital that banks have to hold against potential losses.

Regulations – unlike Directives – give member states limited scope for tailoring new rules to domestic circumstances, and are the most binding form of EU legislation. In their letter, the countries warn that "a regulation would prevent member states from increasing or varying pillar one requirements, such as capital levels or risk weights, even when a specific situation justified it".

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