A sign is seen outside the JPMorgan office in Los Angeles
A sign is seen outside the JPMorgan office in Los Angeles, California, October 12, 2010. JPMorgan Chase & Co. will report its third quarter earnings on Wednesday. REUTERS

European Union finance ministers failed Thursday to hammer out new global banking regulations, highlighting the resistance regulators on both sides of the Atlantic face as they push for tougher banking rules to ensure banks won't spark another great recession, as they did in 2008.

In a marathon negotiation session that stretched into the early hours of Thursday, EU ministers left the table without producing an agreement. Danish Deputy Prime Minister Margrethe Vestager, who led the meeting, said the ministers had made huge progress and will make a new attempt to end the deadlock at their next meeting in Brussels on May 15.

Britain refused to back a 700-page draft law, weighing 1.5 kg (3.3 pounds), and designed to introduce globally agreed standards for European banks, Reuters reported. Britain wants to require its banks to build up even higher defenses without having to go to the European Commission for approval. Poland and Sweden made similar demands.

British Chancellor George Osborne said the draft fell short of what had been agreed to by the Basel committee of regulators.

I am not prepared to go out there and say something that is going to make me look like an idiot five minutes later, Osborne said during a televised portion of the negotiation, referring to potential loopholes allowing some banks to sidestep new capital standards agreed to by global regulators.

The EU is in the process of writing an international agreement on capital defenses for banks into European law that would determine the level of risk European banks can take and what regulators can do to avoid the 2008 financial crisis from happening again.

The so-called Basel III deal would force banks to increase their highest-quality capital gradually from 2 percent of the risky assets they hold to 7 percent by 2019. An additional 2.5 percent would have to be built up during good times.

Meanwhile, U.S. Federal Reserve governor Daniel Tarullo met with six U.S. bank bosses Wednesday to discuss the recent stress tests and to hear about the banks' concerns over proposed new regulations.

According to the Fed's statement issued after the meeting, the bankers presented their views regarding several pending rulemaking proposals under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Their comments would be considered together with all other comments and feedback received from other interested parties, the Fed said, adding that neither governor Tarullo nor Federal Reserve staff would, during the meeting, respond or reply to views expressed by the bank representatives.

Goldman Sachs Group Inc. (NYSE: GS) Chief Executive Officer Lloyd Blankfein; JPMorgan Chase & Co. (NYSE: JPM) CEO Jamie Dimon; Bank of America Corp. (NYSE: BAC) CEO Brian Moynihan; Morgan Stanley (NYSE: MS) CEO James Gorman; U.S. Bancorp (NYSE: USB) CEO Richard Davis and State Street Corp. (NYSE: STT) CEO Jay Hooley attended the closed-door meeting.

Legislators and regulators make policies, which is appropriate, said Goldman's Blankfein, the Wall Street Journal reported. But we are experts in our industry and feel a duty to advise as to what we think are the consequences of decisions and trade-offs, to the markets and to the economy. In this regard we made some points and suggestions in an effort to improve the outcome.